Aero In Financial Trouble

Aero is experiencing financial difficulties regarding the financing of its fleet of B737-500s. The aircraft were initially leased from Oceanic Bank (both the airline and the bank were owned by the Ibru family at the time and no formal contract was put on paper), but since the Central Bank of Nigeria took over the bank last year, it tries to change the conditions of the lease. The bank wants to transfer the aircraft to the airline against loans under unfavourable conditions. The stance of the new management of Oceanic Bank has precipitated fears that Aero may have to cancel services because of the lack of working capital and payments not being made to creditors.

In the past year AeroContractors Company of Nigeria Ltd has been split into two divisions: Aero (the passenger airline) and Rotary Wing (helicopters servicing the oil industry in partnership of CHC). Aero Contractors of Nigeria was formed in 1959 as a wholly owned subsidiary of Schreiner Airways B.V. of the Netherlands. The fixed wing division currently operates four Dash 8-Q300s, two B737-400s and five B737-500s. Two more B735s are awaiting delivery at Lasham.

Update: here is the reaction of Oceanic Bank.

Aero - B737-500 - 5N-BLD (Copyright KCI - Global Aviation Images)

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One response to “Aero In Financial Trouble”

  1. Ezeukpo says :

    Nigerian banks are clearly going hysterical. I don’t know why people such as Sanusi are given so much credit when the banks are squeezing the life out of Nigerian companies, right under his nose. Ridiculous terms and interest rates, unilaterally imposed on Nigeria’s #2 airline, is surely a recipe for disaster. If the Nigerian government doesn’t read the riot act to Oceanic, and soon, Aero will surely collapse and join the long history book of Nigerian airlines. I think this is a pure classic example of where a direct subsidy intervention is required and warranted. Nigerian jobs are at stake.

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