Bloomberg News

Air Nigeria Suspended for Financial Audit by Regulator

June 22, 2012

Nigeria suspended domestic flights by Air Nigeria to allow for a financial audit of the airline, aviation officials said.

Local flights by the airline, which flies to eight cities in Africa’s top oil producer, were grounded yesterday, Joe Obi, a spokesman for the Aviation Ministry said today by phone. The suspension will remain in place until the airline resolves “internal issues” that are “critical to safety,” Nigerian Civil Aviation Authority spokesman Sam Adurogboye said earlier by phone from Lagos, the commercial capital, without giving details.

Flights were suspended “over alleged indications that the airline is in financial distress,” Air Nigeria said in a statement e-mailed today. Its Lagos-London services aren’t affected, the company said.

The halting of the airline’s flights comes after a Dana Airlines Ltd. Boeing Co. (BA:US) MD-83 flight from Abuja, the capital, crashed into buildings on approach to Lagos airport on June 3, killing all 153 on board. It was the world’s deadliest air crash this year.

Air Nigeria resumed flights after Adurogboye said on June 13 that the airline was grounded for routine safety checks on its planes following the suspension of a strike by its workers. The airline said it was given a “clean bill of health.”

The Federal Inland Revenue Service said on June 18 it arrested Kinfe Kayssay, Air Nigeria’s managing director, for an alleged failure to pay taxes of 4.9 billion naira ($30 million), including arrears. The company hasn’t filed annual tax returns for 2011, the agency said in a statement on its website.

Police Raid

The airline said it was raided by armed policemen and inland revenue service officials demanding taxes allegedly owed when the airline was partly owned by Richard Branson’s Virgin Atlantic Airways Ltd., before Jimoh Ibrahim, the current owner, acquired it in April 2010.

“We are at a loss as to what the FIRS has been doing for the past eight years without collecting the taxes from the previous management of the airline,” Air Nigeria said in the statement. All taxes have been paid since Ibrahim acquired the airline, it said.

The Aviation Ministry said on June 11 it set up a panel to review the enforcement of regulations by the NCAA, and compliance by domestic airlines.

Dana flights were suspended on June 5 indefinitely. The Dana plane’s flight and cockpit voice recorders were sent to the U.S. for analysis, and the cause of the crash is still unknown.

To contact the reporter on this story: Maram Mazen in Abuja at mmazen@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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