Ethiopian Ends Negotiations To Manage Arik Air

 - December 26, 2017, 10:22 AM
Ethiopian Airlines CEO Tewolde Gebremariam cut off talks to assume management control of Arik Air due to what he described as the complex nature of the negotiations.

Ethiopian Airlines has stopped negotiations with the government of Nigeria to manage Arik Air, the biggest private Nigerian airline, Ethiopian’s chief executive has disclosed.

The government of Nigeria through the Asset Management Corporation of Nigeria (AMCON), took control of Arik Air after the airline failed to pay its employees and creditors for months and grounded most of its aircraft. In early 2017 the Nigerian government asked the management of Ethiopian Airlines to assume control of Arik Air on a management contract basis. Nigerian and Ethiopian officials shuttled between Abuja and Addis Ababa to hammer out a deal. However, Ethiopian Airlines Group CEO Tewolde Gebremariam told AIN that his company ceased talks with AMCON due to the complex nature of the negotiations. 

“We decided to stop the negotiation due to financial and legal complications,” he confirmed. However, Gebremariam said Ethiopian remains interested in starting an airline in Nigeria. “At least there are two initiatives that we are closely following,” he said. “The first initiative is the national airline that the government of Nigeria is undertaking with Lufthansa Consulting Services. We have submitted our expression of interest. On the other hand, we are discussing [possibilities] with private carriers in Nigeria. We may pick one of them and work with them.”   

The government of Zambia recently chose Ethiopian as a preferred strategic partner to reestablish national carrier Zambia Airways. The Zambian government intends to make an initial investment and own 55 percent of the new airline, while Ethiopian holds a 45 percent stake. 

The Ghanaian government has also shortlisted Ethiopian as one of the three airlines to relaunch a national carrier in the West African country. Ghanaian minister of aviation Cecelia Dapaah announced that Ethiopian Airlines, Air Mauritius, and indigenous carrier Africa World Air all remain deeply engaged with the government. The talks stem from a government policy to reestablish a flag carrier following the demise of Ghana Airways in 2004 and Ghana International Airlines in 2010.

Gebremariam told AIN that African airlines should collaborate to withstand stiff competition from so-called international “mega carriers.” Non-African airlines now carry 80 percent of the passenger traffic between Africa and the rest of world. “In the 1990s African airlines had a 40 percent share,” he said. “Unless we cooperate and change the diminishing market share of African airlines…there will not be any homegrown airlines after ten years,” he said.