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Arik Air takeover: Ethiopian Airline ends talk with Nigeria

Fikayo Owoeye by Fikayo Owoeye
5 years ago
in Business News, Company News
Arik Air takeover: Ethiopian Airline ends talk with Nigeria

Tewolde GebreMariam, chief executive officer of Ethiopian Airlines Enterprise, speaks during the International Air Transport Association's (IATA) annual general meeting in Cape Town, South Africa, on Monday, June 3, 2013. Airline earnings will be 20 percent higher this year than forecast just three months ago as capacity cuts help pack planes to record levels, the International Air Transport Association said today. Photographer: Nadine Hutton/Bloomberg *** Local Caption *** Tewolde GebreMariam

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Ethiopian Airlines has announced that it has stopped further negotiations with Nigeria Government  through Asset Management Corporation of Nigeria to manage Arik Air.

The Government of Nigeria through the Asset Management Corporation of Nigeria (AMCON),  took-over the management of the airline to protect shareholders and investors fund.

Sequel to that, the Nigerian government approached Ethiopian Airline to assume the management of the airline on a management contract basis. However, Ethiopian Airlines

Group CEO Tewolde Gebremariam has revealed that his company ceased talks with AMCON due to the complex nature.

“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.

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 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.”
Gebremariam stressed the need for African airlines to collaborate in order 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.
Arik Air has been embroiled in series of legal tussel between the government and its shareholder. The shareholders had earlier  filed a N20billion suit against AMCON and Ethiopia Airline  over plans  by the government to hand-over the management of the airline to Ethiopian Airline.
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.
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