Stakeholders condemn Keyamo over Arik Air grounding

Aviation stakeholders have asserted that the Minister of Aviation and Aerospace Development, Festus Keyamo, committed a blunder by grounding Arik Air over $2.5 million, given that the Asset Management Agency (AMCON) has an interest in the acquisition of the assets of the airline.

They stressed the need for the minister to stop interfering in matters that are best handled at the agency level.

Prior to the appointment of a Receiver Manager in 2017, AMCON already had a Fixed and Floating Debenture Charge on all assets of Arik Air, and the insolvency practice in Nigeria, as directed by the Companies and Allied Matters Act (CAMA) as well as the Insolvency Act, dictates that all court cases should be stopped once a receiver has been appointed.

The stakeholders wondered how AMCON allowed the matter to go all the way to the Supreme Court after that, and the last part was the judgement debtor only applied to have these assets attached recently and not as part of the judgement against Arik.

One of the stakeholders, who pleaded anonymity, said, “The assets do not belong to Arik and it is not theirs to give. I believe the HMA should have weighed in and allowed Arik to continue to operate the assets while AMCON pursued legal redress because of the workers and the capacity pressure in the industry at the moment.”

The Nigeria Civil Aviation Authority (NCAA), in a statement signed by the Director of Public Affairs and Consumer Protection, clarified that it only grounded 3 Arik Air aircraft following a court order/attachment and not the entire fleet of the airline, saying they are duty-bound to comply with the court order attaching Arik Air’s aircraft (5NMJF; 5NMJQ; 5NBKX) following the determination of its case at the Supreme Court and to ensure compliance with regulatory and safety standards.

However, another top commentator said the Aviation Minister committed a real blunder as it goes against everything he has been preaching about developing the dry lease space in Nigeria, adding that it also shows a need to immediately stop interfering in matters that are best handled at the agency level.

He said the industry was glad to have learned silk, but wondered why the interest of a private firm would override a receivership, questioning how a party in litigation can seize assets that were already under first lien by a financier, thereby usurping the order of security.

The commentator further said, “How do we explain to any financier in the world that security and liens in Nigeria are secure? Isn’t this worse than failing to return an asset upon default, something we’re persistently accused of?

“For now, the supposedly secure parties who financed these assets are hearing that they will be auctioned with their first lien in place? What have we been preaching that we still operate a kangaroo legal system?

“So, how will any Nigerian airline access global markets? This isn’t new. The other day, we were planning on butchering a third-party holder’s aircraft. How does a founder’s personal loan become the liability of a corporation? Possibly because we still call incorporated airlines someone’s airline.

“Even Medview, that went public, was still an individual’s airline. This is possibly the worst mess the Nigerian aviation industry has gotten into in the middle of effecting change.”