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The Asset Management Corporation of Nigeria (AMCON) has announced that it has taken over the management of Arik Air, Nigeria’s largest carrier, to save the airline from imminent collapse. AMCON said in a statement released on Thursday that its decision to assume control of Arik Air underscores the government’s desire to instill sanity into the aviation sector in order to avert any major catastrophe.

The agency said it has appointed Captain Roy Ilegbodu as the new Managing Director of Arik Air, who will serve under the receivership of Oluseye Opasanya (SAN).

“The development will afford Arik Airlines, which is the largest local carrier in the country, to go back to regular and undisrupted operations, avoid job losses, protect investors and stakeholder funds as well as ensure safety and stability in the already challenged aviation sector,” said Jude Nwauzor, Head of Corporate Communications at AMCON.

Arik Air, which ferries about 55 percent of the country’s air passenger traffic, has been plagued by bad corporate governance, erratic operational challenges, inability to pay staff salaries, and a heavy debt burden amongst other issues. The airline reportedly owes AMCON up to $600 million.

Hadi Siriki, the Minister of State for Aviation, said given Arik Air’s pivotal role in the country’s aviation sector, the AMCON intervention will enhance the long-term economic value of the airline, revitalize its operations, and sustain safety standards.

“All necessary steps have been taken to ensure that there would be no undue disruption on Arik’s regular business operations or activities of other stakeholders, on account of the recent changes in the leadership and management of Arik Airline,” the minister said.

On Wednesday, Arik Air reportedly suspended its flight service to the John F. Kennedy International Airport, New York, in order to conduct scheduled maintenance checks on two of its aircrafts. But AMCON said several of Arik Air’s aircrafts have been grounded owing to non-payment of leases and insurance premiums.

“The myriad of issues confronting Arik Air of late ranges from confiscation of aircraft due to non-payment of leases, frequent flight delays, constant fracas between Arik Staff and irate passengers at both local and international airports etc.,” the agency said. “The Airline is also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing repossession of its aircraft by lessors. Various class actions are pending against the airline all over the world.”

Prior to AMCON’s intervention, officials of the Economic and Financial Crimes Commission reportedly visited Arik Air’s headquarters in Ikeja to meet Joseph Arumemi-Ikhide, the airline’s erstwhile Chairman.