Arik Air in trouble, may face sanction by Nigeria Government over debt

Nigerian News

There are strong indications that the Federal Government is ready to inflict the big stick upon recalcitrant debtor airlines in Nigeria’s aviation industry, with about N48 billion now said to be owed by them in the past few years.

Arik Air, the nation’s biggest airline, is allegedly also the highest debtor in the industry, owing N18 billion to the agencies. This figure includes N12.5bn the Federal Airports Authority of Nigeria (FAAN) claims Arik has owed since its commencement of flight operations in 2006.

A source close to the Ministry of Transportation confided in our correspondent over the weekend that plans are underway by the government to disrupt operations of the debtor airlines any moment from now.

For instance, the source alleged that at the Nigerian Airspace Management Agency (NAMA), the total debt liabilities of the airlines, mostly by the domestic airline operators, have reached N8.08bn.

According to the source, the N8.08bn covers the period 2001 to June 2016, but some of the airlines involved have gone out of business.

Providing highlights of the debt situation in the industry, the source said:

• Between 2001 and 2013, the en route charges owed the agency was N3.8 billion; and from January 2014 till June 2016, the airline’s debts were N1.6 billion.

• Liquidated airlines, including Bellview, Chanchangi, ADC, and IRS, jointly owed NAMA N1.05 billion;

• Debts owed NAMA from aerodromes by private holders and the States are N1.5billion; and

• The airlines and concessionaires jointly owe the Federal Airports Authority of Nigeria (FAAN) N30 billion.

On the recovery of these debts, the source explained that NAMA has recovered N329 million.

“We’ve been on the debt recovery drive in the past two months,” he stated. “All the agencies started the debts recovery vigorously almost the same time, but some of them have been very recalcitrant, and we will apply the big stick very soon.”

He noted that action started on one of the airlines last week, but that care was exercised not to disrupt passenger operations.

“We are doing the drive in a very systematic way,” he said. “The Pay-As-You- Go regime we started in NAMA some few years ago did not work because of several interferences from numerous high places.”

A FAAN source threatened that the management might involve the Economic and Financial Crimes Commission and the Independent Corrupt Practices Commission in recovering the debts owed it by companies in the sector, as well as by airlines both dead and existing.

The spokesman for FAAN, Yakubu Dati recently told journalists that the agency had exhausted all avenues for recovering debts from the operators and confirmed that the anti-graft agencies might be brought in.

According to Dati, the agency’s management had attempted recovering the debts through the National Assembly, the Ministry of Aviation and even the presidency, but that the debtor organizations hadremained adamant.

“We have appealed to them in the past to pay up their debts, but we didn’t get any impressive response from them. Now, we want to look at other options like EFCC and ICPC that can really question the debtors.

“It’s a matter of corruption. It’s part of the vices that the government is fighting against. You can’t enjoy our services without paying for them. It’s not right; it’s not done anywhere,” he said.

At the Nigerian Civil Aviation Authority (NCAA), the 5% Ticket Sales Charge (TSC) the airlines collect on its behalf has grown to about 10 billion over the years.

NCAA also ordered that reconciliation of all outstanding debts by the airlines must be completed within 60 days.

A recent statement by the spokesman of NCAA, Sam Adurogboye, hinted that the directive was handed down to the airlines at a meeting held with the operators at the agency’s headquarters Annex at the Murtala Muhammed International Airport in Lagos, on non-remittance of the TSC.

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