Nigerian Government Takes Over Arik Air, the biggest airline in West Africa

Nigeria’s government is taking over the country’s biggest airline, Arik Air, to prevent “a major catastrophe” in the national aviation industry, the Asset Management Corporation of Nigeria (AMCON) said Thursday.

Arik is the biggest airline in West Africa and flies 55 percent of domestic flights in Nigeria as well as a transatlantic route New York.

The Asset Management Corporation of Nigeria said the heavily indebted airline has not paid workers for months and has had aircraft seized for non-payment of leases.

AMCON said in a statement that Arik Air’s heavy financial debt burden, bad corporate governance, erratic operational challenges and other issues that required immediate intervention.

Airlines have been hard hit by Nigeria’s currency crisis, with tickets paid in devalued naira but scarce foreign currency needed for fuel. Several foreign airlines, including United and Iberia, pulled out of Nigeria last year over the currency crisis, in which they lost millions of dollars while the government blocked their remittances in foreign currency and the naira tumbled.

Arik Air Management team said that it would challenge the takeover of the airline by the Assets Management Company of Nigeria (AMCON) in court. Arik Air Senior Vice President, Capt. Ado Sanusi, revealed this at a joint briefing with the newly appointed receiver Manager, Mr. Oluseye Opasanya and the airline’s technical consultant, Capt. Roy Ilegbodu:

“As responsible citizens, we have obeyed the court order which appointed the Olaniwun Ajayi as the receivership manager. We will comply but I want to make it clear that we have a right to challenge the court order. In the coming days, we will make our position known. It is a court order and we can challenge it and we will challenge it to the highest court of authority,” Sanusi said.

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