Arik owes IATA $78 million as new management plans return of five aircraft into service

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REPORTS making rounds about the viability of Arik Air before the airline’s takeover by the Asset Management Corporation of Nigeria (AMCON) is said to be greatly exaggerated especially as the asset managers have uncovered a fresh $78 million debt owed the International Air Transport Association(IATA).

It was learnt that the new debt was uncovered as the old management of Arik Airlines failed to pay IATA monies accrued from debts yet to be settled by the airline for the services that were rendered to it.

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There have been reports on how AMCON reduced the airline’s flight services to about 30% and how aircraft had been out of service however, Chief Executive Officer of S&T, Simon Tumba and Media Consultant to Assets Management Corporation of Nigeria (AMCON) stated that the reports were stating the obvious.

According to him, after AMCON takeover, the receiver manager had announced the cut down of flights due to aircraft available which had shrunk from 30 to about 10 and so operations had to be streamlined to tarry the aircraft operationally available.

Recall that Arik on its own before the AMCON takeover suspended its flight operations to the John F. Kennedy International Airport, New York, United States, claiming that the two Airbus A330-200 aircraft dedicated to the route have been taken to France for C check at the same time.

Equally more than eight aircraft are currently grounded at the tarmac making it difficult to meet their routine commercial flights.

Tumba further said the new management is actually working on ensuring the return of five of the airline’s aircraft stating that when those arrive the airline’s management may choose to look at lucrative routes to fly.

Tumba also lamented that the carrier was yet to remit pensions to pension administrator with debts owed to service providers all over the world.

He further alleged that the new management of the airline had no record of operations of the airline since 2015, making it difficult to trace its transactions as the former management was not being cooperative in the matter.

He stated that the new management is focused to reposition the sector, adding that contrary to insinuations that AMCON wants to liquidate the firm, he said, “Nothing is farther from the truth.”

“Arik is very critical to air transport in Nigeria.  AMCON wants to manage the airline and return it to profitability. One man used to decide everything. There was no board. Everything rotated from one man.”

He expressed the hope that Arik could still be turned around because it had the capacity to be profitable.

He added that the old management has sued AMCON over the take-over of the company on February 9, 2017.

Recall last week that   Arik Air’s huge indebtedness caused albeit the temporary suspension of the carrier from its Billing Settlement Plans (BSP).

IATA Area Manager, South West Africa, Dr, Samson Fatokun in a statement disclosed that the airline’s suspension from the IATA financial systems does not affect its IATA membership or IOSA registered status, adding that Arik Air remains a member of IATA and a fully IATA Operational Safety Audit (IOSA) registered airline.