IATA Suspends Arik Air From Its Billing Settlement System Plan


Yemisi Izuora

Arik Air has been suspended from the International Air Transport Association, IATA, Billing, and Settlement System Plan, BSP.

The BSP which is the clearing house for over 250 global airlines said, however, that it is currently working with the new management of Arik Air to resolve the problem.

IATA Area Manager, South West Africa, Dr, Samson Fatokun in a statement disclosed that the airline’s suspension from the IATA financial systems does not affect its IATA membership or IOSA registered status, adding that Arik Air remains a member of IATA and a fully IATA Operational Safety Audit (IOSA) registered airline.

His words, “IATA is currently working with the new management of Arik Air to resolve the airline’s suspension from the IATA Billing and Settlement Plan (BSP) and Cargo Account Settlement System (CASS).

“The airline’s suspension from the IATA financial systems does not affect its IATA membership or IOSA registered status. Arik Air remains a member of IATA and a fully IATA Operational Safety Audit (IOSA) registered airline”, he added.

BSP is a system designed to facilitate and simplify the selling, reporting and remitting procedures of IATA Accredited Passenger Sales Agents, as well as improve financial control and cash flow for BSP Airlines.

A truly worldwide system: there are BSP operations in some 181 countries and territories. The system currently serves approximately 400 participating airlines with an on-time settlement rate of 99.99 per cent. In 2015, IATA’s BSP processed $230.3 billion.

Arik’s predicament with IATA is unconnected with the take-over of the airline penultimate week by the Asset Management Corporation of Nigeria (AMCON) over humungous debts.

Within 48 hours of intervention by the government, Arik Air received assistance to be able to offer smooth flight services.

According to sources, following the intervention of Asset Management Corporation of Nigeria, AMCON noted that virtually all of Arik’s trade creditors are being owed, staff salaries have not been paid for between 4- 6 months, and of the 28 aircraft in Arik’s fleet, only 10 are in operation.

Meanwhile, due to government’s intervention, operations are continuing and the insurance cover for the aircraft which would have expired on Sunday, 12 February has now been sorted out.

Trade creditors and fuel marketers have been assured that all indebtedness will be looked into; as they have offered to support the new management to run the operations smoothly.

Previously the fuel suppliers had suspended credit facilities, but the airline is working now to ensure steady fuel supply, which had been the cause of the airline’s erratic operations.

It was gathered that the flight schedule of the airline may be realigned to match the 10 aircraft in the fleet while sorting out the myriad of problems confronting the airline.

A source close to the airline confirmed that the new management is looking to stabilise its operation by scaling down flight operations based on the number of serviceable aircraft at its disposal, until more aircraft return from C-check and maintenance yards abroad.

Against this backdrop, a new schedule will be announced in the next few days to accommodate its existing fleet of 10 aircraft, he said.

He stated further that: “It is obvious that without government intervention Arik would have virtually stopped operation by Monday of next week. We need public support to understand the enormity of the challenges here, while we stabilise operations over the next few days, as we offer safe, secure and timely services to customers”.

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