The Managing Director of Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru says sole proprietorship in airline business should be discouraged to enable the sector grow in public interest.
Speaking at the Nigeria Travelmart Colloquium 2018 held at Eko Hotel Lagos last Tuesday, Kuru said in the light of repeated failures of airlines in Nigeria over the years due to absence of good corporate governance and given public interest, “sole-proprietorship should be discouraged. Just like in banking, ownership should be diversified.”
In his presentation titled Corporate Governance And Airline Industry Development In Nigeria, he said “it is very obvious that for any change to be effected in the Corporate Governance of the Airline, it must be regulatory-driven. Self-regulation has not worked so far.”
For the industry to move forward, he recommended for the regulator, professional scrutinizing of cash flow for setting up airlines to make business sense, provision of affordable sources of funding and access to foreign exchange, scrutinizing of ownership and source of funding of the prospective investors to confirm fitness, vetting and checking of all the prospective owners of the company and conducting of routine and deep examination of the operations and books of the airline to ensure compliance to set standards.
Kuru also called for enforcing of existing standards and penalizing of airlines for non-compliance and appointment of Independent Directors with requisite experience on the Board of all Airlines.
“Regulation plays a prominent role in promoting good governance in order to protect public interest,” he added, adding that the anchor of good corporate governance is the board of directors.
Organizer of the event, Mr. Simon Tumba had earlier in his welcome speech, said that this third edition of the event was informed by various corporate governance issues, including the extravagant lifestyles of some Nigerian local airline operators at the detriment of their airlines’ survival and public interest.