Local Air Fare May Hit N400k as FG Grounds Arik Air over $2.5m Debt 

Return ticket on local airlines in Nigeria may hit N400,000 due to the grounding of four Arik Air Aircraft by the minister of Aviation and Aerospace Development, Festus Keyamo, over $2.5million debt to Atlas Petroleum.

Aviation stakeholders have predicted that with the grounding of Arik Air, the capacity of local airlines will shrink and lead to increase in air tickets prices astronomically.

They argued that with return ticket currently at N283,000, on busy routes, it may hit N350,000 – N400,000, in coming weeks if the impasse continue.

The Aviation minister had grounded Arik Air fleet after the enforcement of an Order made by the FCT  High Court regarding a debt of $2.5 million owed by Arik Airline to Atlas Petroleum International Ltd by attaching their aircrafts.

Arik was further given a notice of Public Auction of the planes by the Court which was slated to hold on the 26th day of July 2024 if they fail to pay the Judgment debt.

Meanwhile, , Arik Air has stated that the decision of the minister to ground its operation was in disregard of the ongoing judicial processes.

According to the chief executive officer, Arik Air ( in Receivership), Captain Roy Ilegbodu, “on February 26, 2016, a judgment was made in favor of Atlas Petroleum International Limited and Engineer Arthur Eze. However, there is an ongoing case in the Federal High Court, where Asset Management Corporation of Nigeria (AMCON) is asserting its secured interest in Arik’s assets.

“Despite this, a writ of attachment was issued on July 18, 2024, targeting our Aircraft, subsequent to which, further to an originating motion filed by AMCON, the High Court of the FCT on July 25, 2024 clearly instructed all parties to maintain status quo. We therefore are perplexed as to the grounding of our fleet, which is an overreach of the ongoing judicial processes and directives of court.

“We believe this action undermines the rule of law and sets a dangerous precedent, prioritizing unsecured private interests over the public good and the rights of secured creditors. We are committed to following the legal process and have full faith in the judiciary to resolve these matters fairly,” he stated.

However, general secretary, Aviation Round Table Initiative (ARTI), Olumide Ohunayo, urged all the parties involved to resolve their differences through a round table.

According to Ohunayo, the grounding of the airlines’ aircraft would lead to capacity gaps that would fuel increase in Airfare across the country.

“There was a court order on some aircraft of the Arik Air, the order was from the Supreme Court, if there is a supreme Court order and you do not negotiate the judgement then this is bound to happen. The ministry has implemented the Supreme Court Judgement that they should have done long ago but decide to wait till July 30th in other for Arik to negotiate with the judgement creditor or they should have gone to court to see how the judgment can be reversed or set aside.

“Also, I expected that there should be human face because Dana is out and there will be strong effect on fares and capacity in the industry. There should be a way out of this process rather than just allowing the grounding of the aircraft and Arik must be ready to come to the table to discuss.

“Due to the state of the industry at the moment, we are lacking in capacity which is affecting fare so I think the debtor, the creditor and the ministry should sit and do serious negotiations to ensure that Arik continue operation while they resolve the issue on ground.

“I am not saying it’s wrong to ground the aircraft but, we must look at how it affects the industry hence, the three must come to the table to see what can be done to solve the issues that have brought about this judgement,” Ohunayo stated.

In the same vein, the Nigerian Airspace Management Agency (NAMA), disclosed that the ministry of Aviation and Aerospace Development is enforcing the judgment of the court.

According to the director, public affairs and consumer protection,  Abdullahi Musa, Arik Air is yet to serve the agency an exparte order stopping further execution of the order but have not been formally served.

Abdullahi stated that the Minister, being a member of the Inner Bar himself understands the implication of the Supreme Court Order dismissing the motion for leave to appeal and will not risk his license as a legal practitioner or his privilege as a Senior Advocate of Nigeria by engaging in acts that will frustrate an order of the Supreme Court of Nigeria.

He, however, urged both parties to resolve their issues as quickly as possible so that the Arik aircrafts in question can resume flight operations.

Moreover, the Federal Airports Authority of Nigeria (FAAN) directed all airport managers across the country to assist the affected Arik Air passengers works out plans to rebook and transfer passengers to other available flights.

According to the director, public affairs and consumer protection, Obiageli Orah, the authority is aware that Arik Airline has been grounded due to litigation issues between the airline and their creditors.

“This is to inform the public that the Federal Airports Authority of Nigeria (FAAN) is aware that Arik Airline has been grounded due to litigation issues between the airline and their creditors. The Authority has instructed all airport managers across the country to assist the affected passengers as Arik Airline works out plans to rebook and transfer passengers to other available flights,” she stated.