Arik Air has negotiated aircraft financing facilities worth over N35 billion to acquire five Boeing 777-300ER aircraft. On 29 July 2008, Arik Air will conclude at a signing ceremony with a consortium of national and regional banks, the Pre-Delivery Payment (PDP) for these aircraft acquisitions.
The consortium comprising of eight of the top banks including, Zenith Bank, Union Bank, Intercontinental Bank, Skye Bank, First Inland Bank and Afribank among others, have partnered with Arik Air, making this a ‘first ever’ successful agreement in the Nigerian aviation financing history. The secured loan facility has been coordinated by Zenith Capital. These new acquisitions are a significant step in Arik Air’s strategy to offer a world class fleet and introduce most modern and new aircraft to the region.
The high profile signing ceremony will be attended by top government officials, senior executives from the finance and aviation sectors, media and industry partners. The event is expected to be hosted at the Arik Air Aviation Centre, Ikeja, Lagos.
Based on Arik Air’s future plans, the airline would require over 50 new aircraft worth in excess of N350 billion in the next 10 to 15 years, providing tremendous opportunities for the financing sector not only Nigeria, but also in the region. The demand for direct air services and air transportation links within the continent, and liberalization and increased cooperation between governments in the region is expected to drive strong growth in passenger traffic and aircraft demand. Such financing agreements create a number of broader economic benefits for the Nigerian economy. In addition to the jobs created directly, this has an indirect positive impact on the labour market. The demand for support services, the spending of incomes earned by employees and the spending by Government of its tax revenues obtained will all strengthen economic growth. More aircrafts and capacity, will further allow access to regular and affordable travel for the Nigerian SMEs. All this points to a bright future as long as Nigeria maintains aviation pro-investment and business culture to nurture growth of trade and tourism.
Michael McTighe, Managing Director Arik Air says ‘Aircraft are an excellent investment since they have long economic lives and mobile assets, providing the opportunity to deploy them within our operations and also between our subsidiary companies. We work with our financial partners to obtain their input to enhance this mobility’.
He added, ‘This financing agreement is a natural strategic step for Arik Air as we seek to expand our existing aircraft financing capabilities. It will allow us to build on our expansion while also enabling us to compete on a global scale. This is definitely a win-win for the Nigerian economy and its financial sector. Despite a global temporary setback, air travel volume will continue to increase and projections show a significant funding gap over the next couple of years between the volume of deliveries and the global airline’s ability to fund them. We welcome the opportunity to be at the forefront of this development in Nigeria.’
Arik Air is Nigeria’s largest airline with a modern state-of the art fleet of 18 brand new aircraft servicing 19 airports with over 91 flights a day and employing a work force of 1200. For more information on Wings of Nigeria, please visit www.arikair.com