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Arik Aircraft Fleet Insurance Cover Expires Today

February 12, 2017

The entire insurance cover on the fleet of the distressed Arik Air will expire on Sunday, SaharaReporters can reveal. This implies that it will be impossible for the carrier to operate on Monday. SaharaReporters gathered that out of the 28 aircraft in the airline’s fleet, only 10 are airworthy, with others in maintenance workshop across the world. 

The intervention of the Asset Management Corporation of Nigeria (AMCON), on Thursday, rescued the aviation industry from another round of crisis that would have crippled air travelers' movement. A source close to AMCON disclosed to SaharaReporters that as at Friday, the corporation was discussing with Arik’s insurers on the possibility of renewing the papers before the close of business on Friday. But it was not clear if the discussions were successful.
The source disclosed that Arik Air does group monthly insurance cover for its 28-aircraft fleet.

Arik Air,  in September 2016, had its operations technically grounded because of the expiration of the insurance of the entire aircraft in its fleet. The situation led to scores of its passengers on the London, New York, West Coast routes and around Nigeria stranded for more than 48 hours.

Arik Air claimed that it grounded its operations in accordance with the Nigerian Civil Aviation Authority (NCAA) and the International Civil Aviation Organisation (ICAO) rules, which forbids airlines from operating commercially without adequate insurance cover.

“The Nigerian aviation industry would have been thrown into another round of crisis just as it happened last September, as the insurance cover of Arik’s aircraft fleet would have expired on Sunday and before our takeover, there was no any preparation by the former management towards their renewal.

“I think those challenges are being tackled by AMCON now. As at Friday, AMCON was making frantic efforts to renew all the papers. As you know, Arik does a monthly insurance renewal of all its aircraft. I hope that it would have been addressed before Monday,” said the source.

AMCON said in a statement, on Saturday, said  within 24 hours of intervention by the government, Arik Air had started receiving assistance to enable it to offer flight services.

AMCON explained that sequel to its intervention, it gathered that virtually all of Arik's trade creditors are being owed. It also learnt that staff salaries have not been paid for between four to six months and that of the 28 aircraft in Arik's fleet, only 10 are in operation.

“Due to the intervention, flights are operating and the insurance cover for the aircraft, which would have expired on Sunday, 12 February, has now been sorted and trade creditors and fuel marketers have been assured that all indebtedness will be looked into; they have offered to support the new management to get operations run smoothly.

“Flight schedule may therefore be realigned to match the 10 aircraft in the fleet, while also sorting out the myriad of problems confronting the airline. It is obvious that without government intervention Arik would have virtually stopped operation by Monday of next week.

“Efforts are being made to return the aircraft in various parts of the world in repair yards, with the aim of stabilizing the airline to offer safe, secure and timely services to customers,”  said AMCON in the statement.


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