The Ministry of Aviation and Aerospace Development has grounded the operations of Arik Air due to a long-standing debt of $2.5 million owed to Atlas Petroleum International Limited.
The directive was issued on Tuesday by Festus Keyamo, the minister of aviation and aerospace development, without providing a reason for the decision.
According to court documents, Arik Air failed to pay the judgment debt, leading to the attachment of their aircraft by the FCT High Court.
A statement by the Nigerian Airspace Management Agency, NAMA, reveals that the court also issued a notice of public auction, which was set to take place on July 26, 2024, if the debt was not paid.
NAMA says, Arik was served with the court order and notified the Supervising Minister, the Minister of Aviation.
According to the statement, the ministry decided to ground the aircraft in question to prevent them from being taken out of the jurisdiction or tampered with, which could frustrate the court’s proceedings.
Reacting to the directive, Roy Ilegbodu, CEO of Arik Air, expressed dismay over the lack of warning or consultation before the order. Ilegbodu highlighted the potential ripple effects on the airline, its passengers, employees, and the broader Nigerian economy.
“The management of Arik Air (In Receivership) is dismayed by the sudden order issued by the honourable minister of aviation to ground our aircraft,” Ilegbodu said. “This decision, made without warning or consultation, has serious repercussions for our valued passengers, dedicated employees, and the broader Nigerian economy.”
Explaining further, Arik Air had previously appealed the court’s decision, but the appeals were dismissed by the Court of Appeal and the Supreme Court, adding that, the Supreme Court’s ruling dismissed the airline’s application for leave to appeal, paving the way for the enforcement of the court’s order.
The Minister of Aviation, a member of the Inner Bar himself, it notes emphasized the importance of complying with the Supreme Court’s order to avoid any legal repercussions.
The parties involved are encouraged to resolve their issues as quickly as possible to allow the Arik aircraft to resume flight operations.
Arik Air was taken over by the federal government in February 2017 through the Asset Management Corporation of Nigeria (AMCON) due to a debt profile exceeding N300 billion. Following the takeover, the airline’s management team was dissolved, and a receiver manager was appointed.
Addressing the legal context, Ilegbodu noted that the minister’s decision disregards ongoing judicial processes. He referenced a 2016 judgment in favor of Atlas Petroleum International Limited and Engineer Arthur Eze, and ongoing litigation where AMCON asserts its secured interest in Arik’s assets. Despite a writ of attachment issued in July 2024, a High Court of the FCT had instructed all parties to maintain the status quo.
Roy Ilegbodu added further,
“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."
“We stand with our passengers and employees during this challenging time and are working tirelessly to resolve this situation. Your support and understanding are greatly appreciated.
“We sincerely regret any inconvenience caused to our esteemed passengers.”
Meanwhile the Federal Airports Authority of Nigeria (FAAN) said it has put in place measures to assist the stranded Arik Air passengers.
FAAN stated that it 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,” FAAN stated in a statement by its spokesperson, Mrs. Obiageli Orah.
Ilegbodu urged authorities to reconsider the grounding order and allow the airline to continue its operations, serving the public and supporting the economy.
Arik Air’s management also apologized for any inconvenience caused to passengers, assuring them of efforts to resolve the situation swiftly.
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