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Another 78-mln USD debt rocks Nigeria's largest airline

Xinhua, February 28, 2017 Adjust font size:

Nigeria's largest domestic airline Arik, which was recently taken over by the government due to its high debt profile, owed the International Air Transport Association (IATA) the sum of 78 million U.S. dollars, an official said on Monday.

The debt was for all aviation services provided to the airline under the platform of IATA, Simon Tumba, a spokesman for the airline told reporters in the Nigerian economic hub, Lagos.

The global air transport association recently suspended the Nigerian airline from its Billing and Settlement Plan (BSP), as well as Cargo Account Settlement System due to the huge debt owed.

The spokesman said Arik was also in credit to their fuel suppliers and was not able to pay staff salaries for months.

The Nigerian government on Feb. 9 said it had taken over the operations of Arik Air because it was immersed in huge financial debt.

Minister of State for Aviation Hadi Sirika said the takeover was timely and would ensure stability in the operations of the airline.

Before the Nigerian government took over management of the airline, Arik was owing to the Assets Management Corporation of Nigeria over 300 billion naira (more than 953 million dollars) and was indebted to local banks up to the tune of 50 billion naira, Tumba told journalists.

The airline currently has only about 10 serviceable aircraft in its fleet, out of almost 30 which it operated. Under its management by the Nigerian government, the airline recently reduced its domestic and international routes and flight operations.

Arik Air is believed to carry about 55 percent of the load in Nigeria, according to official data.

The Nigerian government said its taking over the airline underscores its plan to instill sanity in the nation's aviation sector. Endit