Arik Air’s Many Headaches

Many financial and operational problems dog Arik Air of recent but its management insists that there is no cause to worry

By Maureen Chigbo  |  Dec. 16, 2013 @ 01:00 GMT

WHEN Arik Airline, otherwise known as Arik Air,  debuted in 2006, air travellers, who used the airline, were thrilled by its spic and span services which made travelling with it a very delightful experience. But seven years down the line, Arik Air’s services are no longer as efficient as it used to be. Flight delays are frequent in the airline and in most cases no satisfactory reason is given to passengers. One of such flight delays happened recently in one of Arik Air’s flight to Free Town, Sierra Leone, November 3.  The flight which stopped over in Freetown enroute to Dakar, Senegal, was delayed for two hours because contractors billed to re-fuel the aircraft failed to do so unless they were paid.

When the reason for the delay got to the troubled and disappointed passengers some of whom were in a hurry to reach their destinations in order to honour scheduled appointments, they decided to contribute the $1500 needed to pay for the fuel so that they could continue their journey. But the captain, who piloted the plane, refused and ordered all the passengers to disembark because he said he could not continue the flight due to operational reasons.  Alas when the flight was called eventually, passengers were told by the crew,  that it was free sitting, that is, passengers would no longer sit according to the seat numbers indicated in their boarding passes as was the case before the they were asked to disembark.

Arik Air

Arik Air commercial plane

Realnews gathered that before the flight took off from Lagos it was delayed for three hours because of catering issues.  This is not the only flight that has been delayed much to the inconvenience of the passengers. Arik Air’s flight from The Gambia to Dakar, Senegal, was also delayed for five hours the previous Wednesday and from Dakar to Lagos it was delayed for three and half hours. The passengers on board flight 0077 going to Banjul included high networth individuals such as Suleiman Yahyah, chairman, Nigerian Aviation Handling Company, NAHCO, Angela B. Colley Theme, high commissioner/Ambassador, The Gambia High Commission, Tunde Fahm, country manager, Camac Energy, The Gambia and Femi Dagunro, president, Nigerian German Business Group.

One of the passengers, who was on the flight but wishes anonymity, told Realnews that Arik pays contractors on whims and does not maintain the interior of the aircraft. “Passengers travelling from Dakar, Senegal, to Lagos on flight W5070 were almost freezing because there were no blankets. The same thing happened on flight W3077 from Banjul to Dakar which was also delayed. We wonder why the delay in regional and domestic flights has become a regular occurrence with Arik Air. Why can’t Arik pay for fuel supplied to it when the price of one business class ticket is enough to cover the payment for the fuel? It is a disgrace to Nigeria that Arik gets passengers stranded in small countries that Nigeria helped to nurture. Arik should go public and improve its services instead of running a one-man show that cannot be managed properly,” one of the angry passengers told Realnews.

However, the passenger said that the only saving grace in the  problem they had in Dakar, was that Christian Mawuenam Wolle, Arik station manager in Dakar, personally attended to passengers and did everything professionally to make the passengers comfortable.

Arik Air, which prides itself as the wing of Nigeria, also has other challenges besides flight delays. The airline is owing Nigerian Aviation Handling Company Plc N620 million. NAHCO got a judgement at the Federal High Court against Arik last March.. Justice Ibrahim Auta ordered Arik to pay the money into an interest yielding account of the court. NAHCO had sued Arik for refusing to pay handling services it did for the airline for about two years. Arik, in its counter claim, asked for compensation from NAHCO for the damage it did to two of its aircraft in the course of its work. In its judgement, Auta said that it was established in evidence that there was a binding contract and that the plaintiff performed its own part. The court said that it was clear that Arik refused to follow the terms of the contract it entered freely. “The argument of the defendants that they were owed money for the damage to their aircraft does not hold water. They were already in breach of the contract before the accidents happened. Moreover, they are not entitled by law to take law into their own hands, but to look into their agreement and approach the right forum,” Auta said.

Dele Adesina

Adesina

Sequel to the judgement, Dele Adesina, SAN, and lawyer to NAHCO, obtained a garnishee order freezing the account of Arik in Zenith, United Bank for Africa, Union and Keystone Banks. But Arik objected to the order and filed a notice of appeal and a stay of execution of the judgement. In a 21-paragraph affidavit in support of the application, Ababmya Yakubu, lawyer to Arik Air, said the judgement was based on questionable invoices for services not specified in the agreement between the two parties.

“In doing this, the court dismissed the defendants counter-claim to damage admittedly caused in the course of performing the contract. …Any proceeding or order enforcing the judgement in any form will entirely prejudge, destroy, prejudice and render nugatory its right to its claim at the court of Appeal,” the document said. Arik would not comment on the matter because the case is in court.

Pending the time Arik will sort out the court problem, it is still faced with other financial issues involving Federal Airports Authority of Nigeria, FAAN. Yakubu Dati, general manager, communications, FAAN, told Realnews that Arik was owing FAAN N19 billion being money its collects on its behalf.  “We are aware that Arik, a privately owned airline, got about N20 billion from aviation intervention which the federal government provided less than two years ago. The airline is owing FAAN N19 billion. Government has taken steps to create enabling environment for operators in the aviation sector. It removed tariffs on spare parts of commercial airline to make indigenous airline more profitable. The government has spent a lot of money on remodelling the airports and in installing safety equipment. As I am speaking to you, Arik is not remitting the money it collects on behalf of FAAN from ticketing from passengers boarding their flights. Government has done everything to assist the airlines”.

On what the regulatory authorities are doing to check the frequent flight delays by the airline, Dati said that “these are issues that needs to be confirmed. The NCAA, the regulatory body, cannot do anything unless there are petitions based on complaints. There is the NCAA Consumer desk which protects passengers’ right if it receives complaints against airlines. We believe in fairness. What we expect is that if there is an infringement, the victim must lodge  a complaint before we can take action.” On whether the regulatory authorities are bothered that the problems Arik had could constitute a safety breach and endanger passengers life, Dati said that the federal government takes safety issues serious and has done much to ensure that the aviation sector is safe by its huge investment in TRACON, NAMA in addition to the physical rehabilitation of the airports. He added that the world has noticed the giant strides government made in ensuring safety in the avaition sector and that was why Babatunde Aliu, a Nigerian, was elected recently as the president of International Civil Aviation Organisation, ICAO, the world body responsible for aviation safety.

However, Adebanji Ola, public relations and communications manager, Arik Air, in a response to the questionnaire Realnews sent to him, defends Arik Airline against allegations levelled against it, saying Arik Air does not owe aviation fuel suppliers in Sierra Leone. “The arrangement we have with our fuel suppliers in Freetown as in other West Coast stations is bank transfer. On the day in question, it took some time for the oil marketer in Freetown to confirm the money wired to his account by our bankers in Nigeria. We could not have owed a fuel marketer in Freetown and still took off from Lagos on the scheduled flight.

“Also, at no time was the flight from Lagos delayed for three hours because we could not pay for catering services. We have a well-equipped catering unit in-house and this can compare favourably with the best catering services in West Africa. It is from there that we service all our flights. There is therefore no reason for us to owe any contractor when, in the first place, we don’t use their services,” Ola said.

Yakubu Dati

Dati

Ola insists that Arik Air is financially healthy and alive to its responsibilities as a leading player in the aviation industry in Nigeria and West Africa. “There is a lot of misconception about this intervention fund. Let me first say that Arik Air got N15 billion and not N20 billion from the intervention fund. The said fund was not disbursed directly to the airline, but was used to refinance existing loan facility in the banks. So, it went back to the banks.”

Ola said that the Dakar-Lagos flight did not fall in the category of long haul flights where it is mandatory to provide blankets for passengers. However, he said that Arik was “looking at this request by our valued guests on that route and this will be taken care of as we re-launch our regional products in the New Year.”

Arik Air is a Nigerian airline operating a domestic, regional and international flight network. It is currently the largest airline operator in Nigeria and also the national carrier of Sierra Leone. It operates mainly from two hubs at Murtala Mohammed International Airport, Lagos and Nnamdi Azikiwe International Airport, Abuja.   On April 3, 2006, Arik Air took over the former Nigeria Airways facilities in Lagos, some three years after its liquidation, and began reconstruction work. On June 14, 2006, Arik took delivery of two new Bombardier CRJ-900 aircraft to fly domestic routes throughout Nigeria.   Arik Air transported its five millionth passenger on August 6,  2010  and its 10 millionth passenger on  September 18, 2012, both on flights between Johannesburg and Lagos.

On September 20, 2012, the airline cancelled all its domestic operations after aviation officials raided the airline’s office in Lagos, Nigeria. Flights resumed on September 23. Arik Air has built up a strong domestic network. It covers mainly Nigerian and several other West African destinations. “We are proud to say that today; we remain the only Nigerian airline operating new, modern aircraft with next generation, NG, leading-edge design and technology. Our fleet of 25 aircraft (2 Airbus A340-500, 2 Airbus A330-200, 4 Boeing 737-800NG, 9 Boeing 737-700NG, 4 Bombardier CRJ900, 2 Bombardier Q400 and 2 Hawker 800XP Executive Jets) currently enjoys an average age of 6 years only,” Ola said.

Arik Air is not new to controversies. In 2009, the Economic and Financial Crimes Commission sealed off its head office at the local wing of the Murtala Mohammed Airport, Ikeja, for tax evasion. On Tuesday, September 29, 2009, members of staff, passengers and visitors to the head office of Arik Air at the local wing of the Murtala Mohammed Airport, Ikeja, Lagos, were taken by surprise when operatives of the Economic and Financial Crimes Commission, EFCC, stormed the complex and sealed it off. The anti-graft agency’s visit was based on evidence in its possession that the airline has a bad case of accumulated tax evasion put at N4.6 billion. Then Ola told Newswatch magazine that EFCC’s visit was in connection with irregular remittances of tax to the Federal Inland Revenue Services, FIRS, but was not explicit on why the airline defaulted and whether it had remitted and how much.

Arik was at the forefront of the protest that greeted the handover of the old domestic terminal known as GAT-1 to Bi-Courteny, the concessionaire of Murtala Mohammed Airport Terminal 2. The airline contended that GAT was not part of the concession granted the firm and that the issue of the airport’s terminal was already a subject of litigation between it and the concessionaire. It stated that it would not be coerced to relocate to MMA2 and vowed not to operate in any terminal managed by Bi-Courteny. It threatened to ground its operation but never did, citing customer’s interest. The federal government handed over the terminal to the airport concessionaire on Saturday, September 19, 2009.

Olusegun Obasanjo

Obasanjo

The coming of the airline was trailed by controversies. When it began operation, speculations were rife that former President Olusegun Obasanjo was a stakeholder in the airline, which explained why the airline was receiving preferential treatment from the presidency. This thinking was influenced by the approval given to Arik Air to fly international routes as soon as it began operation in 2006.

Last August, a teenage boy beat airline and airport security at the Benin Airport and sneaked into the tyre compartment of a Lagos-bound Arik plane, where he flew safely to the Murtala Muhammed Airport in Lagos. Although Dati, said full and urgent investigation had commenced into the mysterious circumstances that led to the huge breach in airport and airline security, the situation has continued to beat the imagination of aviation authorities in the country. The situation, which has become a major source of worry among the authorities, also led to a blame game between FAAN and Arik.

FAAN, in a statement later said it held “Arik Air liable for the circumstances leading to the stowaway of a teenage boy on its aircraft at the Benin Airport. Arik Air acted with impunity by not stopping the aircraft to check when the crew and ground personnel’s attention was drawn to an abnormality on the tarmac.” On the other hand, Arik blamed FAAN for the huge breach in security, noting that the incessant cases of security breaches at the nation’s airport had become a major source of concern to the airline.

Chris Ndulue, Arik’s managing director, said: “We are worried by the incessant security lapses at our airports. We are appealing to the management of FAAN to immediately address the problem. The management of Arik Air has expressed shock over the incident, wondering how the teenager beat the aviation security personnel at the Benin Airport to get to the runway.” Arik said its pilot had reported to the control tower the presence of a strange boy in the bush about 200 – 300 metres at the end of runway before leaving the airport. Ndulue said the control tower had told its pilot that they were sending security men to the place to arrest the boy but nothing was done. (Read below the full interview with Adebanji ola)

No Compromise of Standard in Arik Air

Adebanji Ola, public relations and communications manager, in a response to the questionnaire Realnews sent to him defends Arik Airline against allegations leveled against it, saying that the company does not owe any fuel supplier among other things. Excerpts:

Ola

Ola

Realnews: Arik is owing aviation fuel suppliers in Sierra Leone, hence the flight from Lagos to Sierra Leone on November 3, 2013, was delayed for two hours because Arik could not pay the suppliers $1500.  Before the flight left Lagos, it was also delayed for three hours because Arik could not pay for the catering services rendered by its contractors. The flight no is WS070. Comment?
Ola: Arik Air does not owe aviation fuel suppliers in Sierra Leone. The arrangement we have with our fuel suppliers in Freetown as in other West Coast stations is bank transfer. On the day in question, it took some time for the oil marketer in Freetown to confirm the money wired to his account by our bankers in Nigeria. We could not have owed fuel marketer in Freetown and still took off from Lagos on the scheduled flight. Also, at no time was the flight from Lagos delayed for three hours because we could not pay for catering services. We have a well-equipped catering unit in-house and this can compare favourably with the best catering services in West Africa. It is from there that we service all our flights. There is therefore no reason for us to owe any contractor when, in the first place, we don’t use their services.

Realnews: The flight, W3077 from Banjul to Dakar  was also delayed for five hours a fortnight ago. Why?
Ola: This is not true. You need to cross check your facts.

Realnews: Arik seems to be having financial problems despite the N20 billion lifeline it got from the federal government’s intervention fund for the aviation. Why?
Ola: For the avoidance of doubts, Arik Air is financially healthy and alive to its responsibilities as a leading player in the aviation industry in Nigeria and West Africa. There is a lot of misconception about this intervention fund. Let me first say that Arik Air got N15 billion and not N20 billion from the intervention fund. The said fund was not disbursed directly to the airline, but was used to refinance existing loan facility in the banks. So, it went back to the banks.

Realnews: Why does Arik not provide blankets for passengers on the Lagos – Dakar flight? Passengers on that route complain of freezing cold.
Ola: The Dakar-Lagos flight does not fall into the category of long haul flights where it is mandatory to provide blankets for passengers. However, we are looking at this request by our valued guests on that route and this will be taken care of as we re-launch our regional products in the New Year.

Realnews: Arik is owing NAHCO N620 million. NAHCO also got a judgement from the court asking Arik to pay. Has Arik complied with the court judgement? If not, why?
Ola: This matter is still a subject of litigation and therefore I cannot comment on it.

Realnews: Why is Arik owing such a huge amount despite the fact that it is making a lot of money and is dominating the aviation business in the country?
Ola: We don’t owe and we pay our bills regularly.

Realnews: What is your reaction to the allegation that Arik is owing FAAN N19 billion?
Ola: It is mischievous for anyone to claim that Arik Air owes Federal Airports Authority of Nigeria, FAAN, N19 billion. It is not only ridiculous; it is nothing short of a figment of their imagination. For a long time, FAAN has not been able to present facts and figures to substantiate their claim of Arik Air’s indebtedness to the agency. They have continued to mention different arbitrary figures at different times. At a time when the issue became very contentious, the Senate Committee on Aviation invited FAAN and all Nigerian airlines to a meeting in Abuja. At the meeting, FAAN could not justify their claim against Arik Air and they asked for more time to put their books together. Since then, FAAN management has not gone back to the Committee with these figures. Arik Air could not owe FAAN N19 billion when most of the agency’s services are now paid in advance.

Realnews: Arik is not remitting the money it collected from ticketing to FAAN. Why?
Ola: We are not expected to remit ticket money to FAAN. If you are referring to the five percent ticket surcharge, this is remitted directly to the Nigerian Civil Aviation Authority, NCAA. This is not in contention. FAAN charges passenger service charge, PSC, which is paid in advance by Arik Air and other airlines.

Realnews: The interior of your aircraft is poorly maintained. Why?
Ola: Arik Air prides itself as having the youngest fleet of aircraft in Africa. The average age of our aircraft is six years and no airline in Africa has this kind of young fleet. We are the first Nigerian airline to operate a brand new aircraft in over 20 years. Sadly, the interior of a few of these aircraft that we bought brand new less than five years ago has been damaged by passengers. We have started replacing the damaged seats and we can only appeal to our guests to please complement our efforts by using the aircraft with utmost courtesy.

Realnews: Is there any other information you have that will enable us to do a balanced story?
Ola: As we celebrate our 7th anniversary as an airline, we want to renew our commitment to providing Nigerians a safe, comfortable and reliable airline of which all can be truly proud. We will continue with our tradition of deploying state of the art equipment. We are proud to say that today; we remain the only Nigerian airline operating new, modern aircraft with next generation, NG, leading-edge design and technology. Our fleet of 25 aircraft (2 Airbus A340-500, 2 Airbus A330-200, 4 Boeing 737-800NG, 9 Boeing 737-700NG, 4 Bombardier CRJ900, 2 Bombardier Q400 and 2 Hawker 800XP Executive Jets) currently enjoys an average age of six years only.

The above notwithstanding, a modern fleet is – in the final analysis – only as good as both the maintenance service provider and governing maintenance programme.  To this end, we have been resolute in our determination to marry our world-class fleet together with equally world-leading maintenance service providers such as Lufthansa Technik, Lufthansa Cityline, Iberia Engineering and Samco Engineering.  These “full service, in-country” relationships have been secured under long-term contracts thus reaffirming our commitment to your continued travelling safety.

Our safety record is as a result of our fastidious adherence to standards set by the Nigerian Civil Aviation Authority, NCAA, and the International Civil Aviation Organisation, ICAO. Currently, Arik Air is the only Nigerian airline registered under the auspice of the “International Air Transport Association, IATA, Operational Safety Audit” (IOSA for short).  “IOSA” is the benchmark for global safety management in airlines and is the primary prerequisite for membership of IATA.  Arik Air has been (and remains) a full-fledged member of IATA since 2011.

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