Middle Eastern investors in talks with Nigeria's Arik Air

Arik Air B737-700

Arik Air (W3, Lagos) chairman Joseph Arumemi-Ikhide has confirmed talks have taken place with investors from the Middle East interested in investing in the Nigerian carrier.

According to a source close to the talks who spoke to The Nation newspaper on condition of anonymity, the talks have focussed on the offset of Arik Air's hefty debt portfolio, said to stand at at least NGN145 billion (USD461 million).

“We have been discussing with investors. We are having serious discussion with this organisation, which is based in the Middle East, because they have a package to invest in Africa and take advantage of the region’s growing economy," the source said. “They are interested in expanding our operations and will give us additional airplanes to augment the six we ordered from Boeing (BOE, Chicago O'Hare)."

Arik Air has been under the control of the Nigerian government's Asset Management Corporation of Nigeria (AMCON) since February. At the time, AMCON justified the move given rising concerns about the viability of the airline given delayed payments to creditors and employees as well as frequent cancelled flights.

Late last month, AMCON managing director Ahmed Kuru ruled out the possibility of foreign investors putting money into Arik Air and another AMCON-run carrier, Aero Contractors (NIG, Lagos), citing their extensive debt overhangs as well as impending legal issues.

Out of a fleet of nine B737-700s, four B737-800s, one CRJ-1000, four CRJ-900s, and four Dash 8-400s, Arik Air is currently using only six B737-700s and one B737-800 to run flights throughout Nigeria as well as to Luanda, Libreville, Accra, Monrovia Roberts, Banjul, and Dakar regionally. The exact status of its regional jets and turboprops is not currently known.

Though Arik Air and Aero Contractors' malaise has been blamed, in part, on poor leadership, Nigeria's continued economic hardships, brought on primarily by dwindling revenue inflows from its primary export - oil, has also played a significant role. This week, a spokesman for the Nigerian Civil Aviation Authority (NCAA), Sam Adurogboye, confirmed that twenty-six start-up carriers have now abandoned their respective AOC drives ostensibly due to a combination of inadequate resources and the regulator's tough new launch requirements.

In a statement to the Daily Trust newspaper, Adurogboye said those that had withdrawn their applications include: Jet Support Services, Airfirst (abandoned since 2015), Air Taraba, Air Jupiter, Continental Aerospace, Jet Leasing Support, Quorum Aviation, Tropical Arctie, Xejet, Revillo Aerospace, Glory Airline, Dominion Air, Mounthill Aviation Resources, Airstream Aviation, Baltic Airlines (Nigeria), Millennium Travels and Tours, New Okada Air, Onedot Aviation, Oriental Airlines, Prime Air Services, Private Airline Services (Nigeria), and Trebet Aviation.

Source:https://www.ch-aviation.com/portal/news/56868-middle-eastern-investors-in-talks-with-nigerias-arik-air



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