The Nigerian government has waded into a legal dispute between privately owned carrier Arik Air and its creditors by grounding the airline indefinitely while litigation between the parties continues. The second-largest airline in Nigeria has cancelled all flights as a result leaving thousands of passengers stranded.
On July 30, 2024, the country’s Federal Government ordered the carrier to cease all flying while legal disputes with a major fuel supplier and other organizations and individuals rumble on. The action has caused an angry response from the carrier which has described the sanction as “disastrous and unjust”.
According to a report published by The Nation in Nigeria, in February 2016, a judgment of $2.5 was made in favor of Atlas Petroleum International in litigation with Arik Air – a debt that seemingly remains unsettled.
Compounding the woes being faced by the airline is further legal action being brought in the Federal High Court against the carrier by Asset Management Corporation of Nigeria (AMCON) which is seeking to repossess some of Arik Air’s fleet. In the latter case, while the court seems to have ruled in favor of AMCON on July 18, 2024, the airline alleges that the creditor was ordered by the court to take no immediate action to repossess its assets given the scale of disruption that would result.
However, to minimize the effects that any further adverse judgments in the case may have on Arik Air and its operations, the government decided to order the carrier to stop flying in the meantime while working in conjunction with other Nigerian airlines and airports to protect affected passengers and their travel plans.
In a statement, Arik Air said the grounding of its fleet has left many passengers stranded, inflating the already high cost of air travel in Nigeria.
“Our priority has always been to connect people and facilitate commerce, especially on critical domestic routes,” the statement said. “The grounding of our fleet disrupts these vital services, leaving passengers stranded and inflating already high travel costs. This decision hurts everyday Nigerians who rely on our flights for business, family, and essential activities. The decision also disregards ongoing judicial processes.
“We therefore are perplexed as to the grounding of our fleet, which is an overreach of the ongoing judicial processes and directives of the court. We believe this action undermines the rule of law and sets a dangerous precedent, prioritizing unsecured private interests over the public good and the rights of secured creditors. We are committed to following the legal process and have full faith in the judiciary to resolve these matters fairly.”
“Arik has always been a proud partner in Nigeria’s growth, providing reliable and safe air travel. We urge the authorities to reconsider this decision, lift the grounding order, and allow us to continue serving the public and supporting the economy. We stand with our passengers and employees during this challenging time and are working tirelessly to resolve this situation,” the statement concluded.
Efforts to minimize disruption
As a result of the government action, the Federal Airports Authority of Nigeria (FAAN) announced that it was making efforts with other authorities to work out plans to rebook and transfer passengers billed to travel on Arik Air to other airlines.
In a statement issued by FAAN’s Director of Public Affairs and Consumer Protection, Obiageli Orah, the authority said: “This is to inform the public that the Federal Airports Authority of Nigeria (FAAN) is aware that Arik Airline has been grounded due to litigation issues between the airline and their creditors. The Authority has instructed all airport managers across the country to assist the affected passengers as Arik Airline works out plans to rebook and transfer passengers to other available flights.”
Until its grounding, Arik Air operated a mixed fleet of 14 aircraft comprising five Boeing 737-700s, three 737-800s, three Bombardier CRJ900s, and three De Havilland Canada DHC-8-Q400s.
