Arik Air is one of the airlines been considered to benefit from a  $20 billion (about N4 trillion) syndicated loans to be provided by the African Export-Import Bank (Afreximbank).
This was disclosed at the Annual Air Finance in Africa summit held  in Johannesburg, South Africa, The Senior Manager, Syndicated and Special Finance Department, Afreximbank, Samuel Mugoya, made the disclosure while presenting a paper at the 25th Annual Air Finance in Africa summit held recently in Johannesburg, South Africa.

He said the loan is meant to assist the beneficiary carriers to revitalise their operations and get out of the financial woods. Although, Mugoya did not disclose the actual amount the bank would give as a bailout to Arik, a source said it could be as much as  $200 million. Mugoya who spoke on “Challenges in Syndicating Aviation Finance Deals for Africa,” said that over 90 per cent of the airline’s earnings come in naira, whereas its expenses are in United States dollars. Mugoya equally said that Africa needed to do more on aviation infrastructure, adding that his interaction with airlines in Nigeria showed that the quality of the runways were bad, posing serious danger to aircraft. “We are working to finance Arik Air’s operations by preparing loans for the airline. Aviation in Africa is still lagging behind. 

For instance, Arik generates 90 per cent of its revenue in naira, but makes expenses in dollars like buying of aircraft spare parts and maintenance of its fleet. That is a real problem not only for Arik, but other airlines. “On aviation infrastructure, Africa needs to improve in order to compete with big airlines. From my interactions with airline operators in Nigeria, they complain of the quality of runway of most of the airports,” he said. 

Contributing, the former secretary general of African Airlines Association (AFRAA) and the convener of the summit, Nick Fadugba, said to syndicate  such financial deals, airlines need to come together and cooperate. “How are you going to finance airplane acquisition when virtually all countries in Africa are junk rated? This is not a good record. We need leadership in Africa. We lack strategy and implementation for all the grand schemes,” he said.

(Culled from www.vanguardngr.com)