Arik Air pleads with CBN over bank loans


Simon Ateba/Aviation correspondent

Nigeria’s biggest airline, Arik Air, on Tuesday, begged the Central Bank of Nigeria, CBN, to allow banks in the country lend money to the airline again.

Last month, the Central Bank barred Arik and Aero Contractors airlines from receiving any additional loans over their massive outstanding debts.

Arik Air, the nation’s top carrier owes the Assets Management of Nigeria, AMCON, more than $534 million, (about N85 billion) according to the CBN, while Aero Contractors, owes more than $203 million to the state-run company.

Ugo Okoroafor, a Central Bank spokesman, had even warned that any bank that goes against the CBN directive on the airlines would face serious sanctions.

“Adverse consequences exist for people who take part in such unhealthy acts,” Okoroafor warned.

But at the press conference on Tuesday in Lagos, southwest Nigeria, the Managing Director of Arik Air, Mr. Chris Ndulue, called on CBN to have a rethink.

“We hope that the CBN will have a rethink. It’s not appropriate for a business like ours,” Ndulue said.

He disclosed that if Arik can no longer borrow money in Nigeria, it will get loans from outside the country.

“If we can’t borrow in Nigeria, we will have to borrow outside Nigeria. We have borrowed money outside Nigeria before and. I think that may be the way to go again,” Ndulue said.

Arik Air Chairman, Joseph Ikhide, who was at the conference, said his airline has never defaulted on its debts and lashed on journalists who write always negative reports about its airline.

He said this year alone Arik has paid about N5.8 billion to Nigerian banks.

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The press conference was called to assess Arik Air operations in the last six years.

Arik Air began operating on 30 October 2006 with four daily flights between Lagos and Abuja, using three brand new Bombardier CRJ900 aircraft.

Nigeria’s biggest airline now has 23 aircraft and has carried over 10.2 million passengers in six years of operation, Ndulue said.

“We control 65 percent of the total domestic market share. We do about 120 daily flights from our two hubs in Lagos and Abuja and we serve 22 destinations across Nigeria, five in West Africa (Accra, Monrovia, Freetown, Banjul, Dakar), two in Central Africa (Angola, Douala in Cameroon), One in South africa, One in London Heathrow, one in New York JFK. We also service 42 routes across the world,” Ndulue said.

Ndulue said Arik Air is now a full member of the International Air Transport Association, IATA, and has completed a successful renewal of its International Operational Safety Audit.

He said Arik Air has invested at least $2 million on cadet pilots training and created over 2500 direct jobs for Nigerians.

“We have made it possible to connect many key cities in the country direct to Lagos and Abuja,” Ndulue said.

Ndulue however, did not know the total money Arik Air has invested over the last six years or how much their expansion will cost them.

“But it’s in billions of dollars,” he said.

Ndulue said that Arik Air will expand its operations to many African countries, including Ivory Coast, Guinea, Congo, Equitorial Guinea, Gabon.

He said the airline will also start flying to Houston from Lagos, as well as Abuja-Kano-Jeddah, Accra-London, Freetown-London.

“We will also expand interlining and code share arrangements to develop services to points beyond Europe, Middle East and USA. We will launch new maintenance hangar, a Maintenance, Repair and Overhaul (MRO) facilities in partnership with Lufthansa Technic. We will have a new super hangar for wide bodied aircraft,” Ndulue said.