The Nigerian government plans to hand over management control of Arik Air to Ethiopian Airlines under an agreement aimed at resurrecting Arik as Nigeria's national carrier.
Nigerian and Ethiopian officials are shuttling between Abuja and Addis Ababa to hammer out a deal on the aviation cooperation agreement. Nigeria’s minister plenipotentiary in Addis Ababa, Godfrey Odudigbo, told AIN that negotiations continue between the government of Nigeria and Ethiopian Airlines over the process by which it would manage Arik Air on a contract basis. Odudigbo said the agreement would also allow Ethiopian Airlines—Africa’s largest carrier—to provide technical assistance to Nigeria in the effort to relaunch Arik as its flag carrier.
Arik Air ranks as the largest private airline in Nigeria and has served as its de-facto national carrier since Air Nigeria ceased operation in 2012. In February, the government of Nigeria, through the Asset Management Corporation of Nigeria (AMCON), took control of Arik Air and grounded most of its aircraft after the airline failed to pay its employees and creditors for months.
Odudigbo told AIN that the governments of Nigeria and Ethiopia meanwhile have established a joint commission to negotiate toward stronger bilateral relations. “At that joint commission meeting, all bilateral agreements would be signed,” he said. “That also includes the management contract of Arik Air.”
According to Odudigbo, the joint commission would meet in November in Abuja, Nigeria, with an eye toward signing the agreement soon thereafter. “We are hoping that the management contract of Arik Air will be signed in November after the joint commission negotiation held in Abuja,” he told AIN. “The government of Nigeria believes that Ethiopian Airlines is doing very well in the aviation industry. We want to learn from their experiences. If they manage Arik Air, they could revive and expand the company in Nigeria.”
Ethiopian Airlines Group CEO Tewolde Gebremariam confirmed that the Arik Air management contract negotiation with AMCON is progressing and that discussions on detailed technical matters with the Nigerian officials have reached an advanced stage. “Without going into details I can say that the negotiation is progressing very well,” he said
Gebremariam noted that while Ethiopian would leave open the possibility of a future equity investment, discussions have so far involved only the management contract.
One-time flag carrier Air Nigeria ceased operation in 2012 due to financial difficulties, leaving Africa’s largest economy without a national airline. Ten years earlier, Nigeria Airways liquidated, and Virgin Nigeria, a joint venture between the government of Nigeria and Virgin Atlantic, had also collapsed.
Arik Air has also suffered from financial difficulties and mounting debt. Established in 2006, Arik, at its peak, served 26 domestic, regional and international destinations including Johannesburg, London and New York, with 29 airplanes, mainly Boeing and Bombardier models. The airline now operates 60 percent of Nigeria’s domestic flights but has pared its international services considerably.
The founders of Arik furiously protested the government’s decision to take over the airline. In fact, the founder of Arik Air, Joseph Arumemi-Ikhide, warned that he would sue Ethiopian Airlines if it dares to take over the management of Arik Air.
Meanwhile, Ethiopian Airlines has become a big player in Nigeria since it began flying there in the 1960s. It serves five destinations in Africa’s top oil producing country—namely Lagos, Abuja, Kano, Enugu and Kaduna—from its main hub in Addis Ababa. “The government of Nigeria trusts Ethiopian because it has been serving Nigeria since we became independent,” Odudigbo concluded.