Surviving airlines are only doing national service, says Arik – The Cable

Joseph Arumemi-Ikhide, chairman of Arik Air, one of Nigeria’s surviving airline, says the policies of the Central Bank of Nigeria (CBN) do not favour local airlines.

Arumemi-Ikhide, who prides himself as the founder of West Africa’s largest airline, also said Nigerian airlines “are just offering national service”, stating that the fares are the lowest in the world.

“Government policies, or central bank policies do not favour us. For example, the CBN said that 60 percent of foreign inflows should be for manufacturers,” he said in an interview  on Channels Television.

“They’ve forgotten that the engine of any economy is air travel. Nothing is provided for us, we have to scramble like every other person.

“The same thing in the tax (system); the FIRS has a different rate for company tax, and airlines are seen as services, so by the time you finish, you pay almost 40 percent.

“So, its only air travel that we pay VAT, road transportation and others don’t pay VAT. So the stakes are against airline operators in Nigeria, from government.”

He said the government need to encourage airline operators with the right policies, adding that the landscape is really tough on airlines.

“We have to source our forex, and spare parts, all of us, all the commercial airlines. It’s really tough, and our fares re the lowest in the world.

“Let me say something, naira is now about 350 to the dollar, and if you look at Lagos to Abuja, it’s less than 35,000, that is less $100.

“There is nowhere you can get it. I consider that all my colleagues and I (are) doing national service.

“You don’t even get fuel; fuel prices are shooting off the roof. Before the flexible exchange rate was introduced, we were buying fuel for about N110 per litre.

“Now it’s N215 per litre and you can’t even get it. The situation in the country is not favourable to the airlines at all.”

The Arik boss said he was in support of a national carrier, emphasising that many developed nations possess national careers.

Over the past week, two Nigerian airlines – Aero Contractors and FirstNation – have suspended operations due to challenging economic realities.