The Minister of Aviation and Aerospace Growth, Festus Keyamo, has been championing important air transport interventions to guarantee the security of stakeholders’ investments. However one extended sob story that may additional take a look at his proficiency is the Arik Air tango between the Asset Administration Company of Nigerian (AMCON) and Arik’s shareholders, WOLE OYEBADE reviews.
Disputes are pure in all human transactions, together with enterprise transactions. Subsequently, peaceable decision mechanisms are in place, starting from negotiation to conciliation and litigation.
Nonetheless, the air transport sector is one trade that tends to lose greater than it ever hopes to achieve from litigation – the final resort in all dispute settlements.
A cursory have a look at the ramps and graveyards throughout main airports in Nigeria tells of the erstwhile serviceable plane which have come to ruins and losses over establishment ante whereas disputants are nonetheless battling it out courts, and sometimes in clear violations of the Cape City Conference that guides the dry-leasing of plane by main producers.
Loads of such situations of authorized impediments have led to Nigeria being blacklisted by the likes of Boeing, Airbus, and the Aviation Working Group (AWG), which perceived Nigeria as a non-compliant nation.
To alter the narrative, the federal authorities launched new tips final 12 months for its Federal Excessive Courtroom to reinforce compliance with the Cape City Conference (CTC) and its related Protocol on Worldwide Pursuits in Cellular Tools, particularly regarding plane.
Days after the rules, the AWG – a not-for-profit authorized entity comprised of main aviation producers, leasing corporations, and monetary establishments – elevated Nigeria’s CTC compliance index rating from 49 to 70.5 per cent, and due to this fact, protected for plane leasing enterprise.
This January, the Export Growth Canada (EDC), a Canadian monetary establishment, was the primary beneficiary of Nigeria’s new fervour for CTC compliance. The Federal Excessive Courtroom in Lagos granted EDC the appropriate to repossess and teardown the controversial CRJ1000 plane with the registration quantity: 5N-JEE from the Arik Air’s fleet.
The courtroom additionally stopped the lads and officers of the respondent (Financial and Monetary Crimes Fee) from harassing, intimidating, detaining and threatening to arrest the candidates or its contractor over the discharge of their lawful civil obligations to take custody, management and teardown of the plane.
It was a belated reduction for the collectors however a victory for the trade and the nationwide picture, displaying stronger character in honouring agreements with overseas companions.
Nonetheless, of subsisting concern are a number of related disputes between native events and the dire want for related interventions. One such trade embarrassment is the seven-year-old dispute between the Asset Administration Company of Nigeria (AMCON) and shareholders of Arik Air.
A rescue mission gone awryRecall that the federal authorities’s particular asset restoration car, AMCON, took over Arik Air in February 2017 as a part of measures to “save” the airline from “imminent collapse”. AMCON had cited gross mismanagement by the house owners of Arik and debt of over N300 billion.
Buoyed by what to do with the airline after six years, the federal authorities, by AMCON, selected a brand new service, NG Eagle, from some viable property of Arik Air. About 4 Boeing 737 airplanes that after belonged to Arik have been stripped and rebranded into NG Eagle’s livery in 2021.
However, if upturning Arik’s fortunes was tough, flying NGEagle may solely be tougher. AMCON’s controversial exit technique from the operations of embattled Arik Air ran right into a battle of curiosity, with the Nationwide Meeting ordering the Nigerian Civil Aviation Authority (NCAA) to withhold its Air Operator Certificates (AOC). The consequence is attendant losses on three grounded plane, insurance coverage premium, workers salaries and different working prices.
Former managing director of AMCON, Ahmed Kuru, mentioned earlier that the plan was to maintain the airline operating by the receiver supervisor and discover technique of resolving the gray points, not liquidate the service.
Kuru mentioned: “There’s at all times a approach out of each decision state of affairs; it’s only a query of give and take. What’s necessary is for us to sit down down with the proprietor of Arik Air, if he (Sir Johnson Arumemi-Ikhide) is prepared, after which agree on what is smart to him and us, to the federal government. Then, we’ll return to the Central Financial institution and the Ministry of Finance and share the decision with him. We’ve resolved extra sophisticated points than Arik, however the two events should perceive that they need a decision.” The decision didn’t occur.
The Head of Company Communication at AMCON, Jude Nwauzor, advised journalists in Lagos that on the coronary heart of the battle is the overall money owed of N455 billion as of December 31, 2024, and in all his investments by the service’s shareholders.
Giving the breakdown of the overall money owed, Nwauzor alleged that Arik, as of December 2024, owed AMCON N227.6 billion, Rockson Engineering N163.5 billion, whereas Ojemai Farms owed the company one other N14 billion, totalling N455 billion. Arumemi-Ikhide owns the three indebted corporations.
The spokesperson additional mentioned that Arumem-Ikhide, in a few of its agreements with AMCON, agreed to the money owed owed the company and signed an settlement on payback however did not honour his phrases.
AMCON insisted that regardless of the marketing campaign of calumny towards it, it could make sure the money owed have been recovered and return the businesses to profitability.
Nwauzor famous that Arik Air was taken over by due course of. He mentioned AMCON had been a part of Arik Air since 2011 however was compelled to take over the corporate in 2017 by appointing a receiver supervisor after a number of interventions failed.
He defined that the receiver supervisor additionally had the choice of both managing or promoting off the property of a debtor firm like Arik Air. Nonetheless, AMCON determined to maintain the airline operating by the intervention of the Federal Authorities.
In response, the Arik shareholders denied all wrongdoing. The Media Workplace spokesperson for Arik shareholders, Godwin Aideloje, mentioned that the airline’s monetary state claims have been false.
Aideloje mentioned that the airline’s challenges stemmed not from monetary mismanagement by the airline itself however from AMCON’s poor dealing with throughout the receivership course of.
He famous the lack of each plane and gear. “One notable incident concerned the seizure of a Boeing 737-800NG in Lithuania in 2023 attributable to AMCON’s failure to satisfy the airline’s monetary obligations. One other Boeing 737-700NG was deserted in Malta, the place it was later dismantled and offered within the gray market.”
He added that two different plane have been left in a deteriorated state in Johannesburg and Addis Ababa, with lacking engines. These developments additional exemplify the disastrous dealing with of Arik Air below AMCON’s receivership, inflicting irreparable injury to the airline’s property and operations.
“AMCON’s mismanagement of Arik Air below AMCON’s receivership has triggered immeasurable hurt to the airline, its staff, and Nigeria as an entire. AMCON should cease its sample of misinformation and be held accountable for the destruction it has triggered.”
The shareholders’ workplace urged the general public to demand transparency in AMCON’s dealings and to carry the company liable for the long-term penalties of its actions.
Aideloje emphasised that this concern transcends Arik Air alone. “It’s concerning the want for correct governance and accountability inside AMCON to forestall additional injury to Nigeria’s company and aviation sectors.
“This isn’t nearly Arik Air; it’s about guaranteeing that AMCON doesn’t proceed to hurt Nigeria’s company panorama whereas avoiding accountability,” he mentioned.
Nonetheless, for neutrals, it behooves the events and the trade at giant to discover a higher mediatory mechanism to resolve the embarrassment.
The place litigation stalls, attempt mediationAviation union chief, Olayinka Abioye, reckoned that the Arik Air episode was a great enterprise gone bitter, and saddened by the unfolding drama whereby sure people are being arraigned in courtroom on the grounds of embezzlement, and the involved events unable to reconcile the debt toll.
His fear partly stems from AMCON’s failing to tell Nigerians how a lot it had made (in revenue) since taking on the airline and the way a lot has been retrieved from the previous proprietor, given the truth that funds have been mentioned to have been made, and firms seized to get well loans taken however not repaid.
“I agree that this embarrassment to the trade may be checkmated if the Honourable Minister of Aviation and Aerospace Growth intervenes, given his authorized career and deep data of mortgage compensation points and all of that.
“He can name all events to a roundtable and type them out. Possibly they could be suggested to settle out of courtroom and neglect about their bruised ego and the standard Nigerian delight. I advocate for an amicable answer to this controversial concern by dialogue outdoors of the courts,” Abioye mentioned.
Apparently in settlement, Secretary of the Aviation Security Roundtable Initiative (ASRTI), Olumide Ohunayo, famous that the embattled shareholders of Arik Air at the moment are emboldened by the contemporary EFCC case towards the ex-MD of AMCON, Kuru, and different workers over their roles at Arik.
He mentioned: “I see that as one facet of the coin, and with that, I see the necessity for AMCON to both get out of Arik or liquidate the airline instantly. Both the house owners pay the debt owed, or the federal authorities step in to take the 2 carriers below AMCON (Arik Air and Aero Contractors) and merge them into one to kind a robust service.
“Whichever approach, arbitration and negotiations must be necessary. But when they proceed on this warpath, I see liquidation imminent, with dire penalties for all events. Whereas AMCON was applauded on the level of entry, in addition they have the accountability to account for the income recovered since they stepped in to handle the state of affairs,” Ohunayo mentioned.
Above all, the Arik Air conundrum is an ailing wind that blows no one good. However the events can nonetheless come to a win-win answer relatively than extend mutual loss.
