BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

______________________________________ Application of:

ARIK AIR LIMITED for exemption authority pursuant to 49 U.S.C. § 40109 and for a foreign air carrier permit pursuant to 49 U.S.C. § 41301

______________________________________ ) ) ) ) ) ) ) ) ) ) Docket No. OST-2010-0279

Motion of SH&E for Leave to File and Answ er of SH&E to App lication of Arik Air Limited for Exemption Au thority and Foreign Air Carrier Permit Authority Communications with respect to this document should be addressed to:

Kenneth P. Quinn Jennifer Trock Pillsbury Winthrop Shaw Pittman LLP (202) 663-8000 (202) 663-8007 (fax) kquinn@pillsburylaw.com Jennifer.Trock@pillsburylaw.comBEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

______________________________________ Application of:

ARIK AIR LIMITED for exemption authority pursuant to 49 U.S.C. § 40109 and for a foreign air carrier permit pursuant to 49 U.S.C. § 41301

______________________________________ ) ) ) ) ) ) ) ) ) ) Docket No. OST-2010-0279

Motion of SH&E for Leave to File and Answ er of SH&E to App lication of Arik Air Limited for Exemption Au thority and Foreign Air Carrier Permit Authority

Motion for Leave to File

Pursuant to Rule 6 of the Department’s Rules of Practice, 1 SH&E respectfully moves for leave to file the following answer to the Application of Arik Air Limited for a Foreign Air Carrier Permit and Exemption Authority, Docket No. OST-2010-0279. This response will not unduly delay the proceedings and should be accepted in the interest of a complete record for the Department ’s consideration of this matter.

Answer SH&E, the world’s largest consulting firm dedicated exclusively to the aviation industry, hereby files this answ er to the Application of Arik Air Limited for a Foreign Air Carrier Permit and Exemption Author ity, Docket No. OST-2010-0279 (“Arik Application”). SH&E respectfully submits that the Department should carefully

1 14 C.F.R. § 302.6.scrutinize Arik Air Ltd.’s (“Arik Air”) ability to meet the Department’s standards to hold foreign air carrier authority, due to the fa ilure of its corporate parent, Arik Air International Ltd. (“Arik Int’l”), 2 to pay significant outstan ding professional fees and expenses owed to SH&E, which call into questio n Arik Air’s financial fi tness. In light of these issues, SH&E contends that granting Arik Air foreign air carrier authority would be adverse to the public interest. 3 In further support hereof, SH&E states as follows: Background: Arik Int’l is the corporate head office of Arik Air and provides management and consultancy services to Arik Air in furtherance of Arik Air’s international service. 4 Given Arik Air’s own public acknowledgements on its website as to its relationship with Arik Int’l, as an initial matter, SH&E reque sts that DOT verify the accuracy of Paragraph 6 the Arik Application regarding Arik Air’s in terest in other aviation-related companies. SH&E was engaged by Arik Int’l in May of 2008, to provide Program Management and Integrator services for five new delivery Boei ng 777-300ER aircraft, ordered by Arik Air from Boei ng and scheduled for delivery beginning in early 2011. In this role, SH&E provided for Arik Int’l overa ll program management of the cabin interior for the Buyer Furnished Equipment, as well as technical advisory se rvices and oversight of the Supplier Purchased Equipment mana ged by Boeing. SH&E’s responsibilities included: management and coordination on the cabin interior de sign, cabin service definition, product selection, sourcing, and de tailed product design; certification;

2 The Arik Air Ltd. website provides: “Arik Air International Ltd is the overseas corporate headquarters of Arik Air in Lagos, Nigeria . . . .” ( See http://www.arikair.com/arikair/raci ne_site/about_us.asp?page=ArikAir-International&id_sessionlangue=2). The agreem ent between SH&E and Arik Air International Ltd. characterizes Arik Air International Ltd. as the “appointed agent for Arik Air Limited.” 3 The Department must make a determination regard ing whether granting a permit and exemption authority to a foreign air carrier applicant will be in the public interest. See 49 U.S.C. §§ 41302, 40109. 4 See http://www.arikair.com/arikair/racine_site/about_us.asp?page=Arik-AirInternational&id_sessionlangue=2.production; delivery and coordination with Boeing on all data submittals, schedules, product deliveries, certification, and installati on integration. SH&E was to provide the

above services for a fixe d fee, plus expenses. The agreement between SH&E and Arik Int’l was modified in September of 2008, based on several changes to the original assumptions in the agreement, which resulted in an increase in the scope of work and expected workload. Despite this increase, SH&E reduced the fixed fee sc hedule by approximately four percent. The agreement between SH&E and Arik Int’ l was then modified again in April of 2009, based on more changes to the original a ssumptions in the agreement, resulting in scope of work additions and si gnificant changes in the original delivery schedule for the aircraft from Boeing to Arik Air. This agr eement increased the fixed professional fees by approximately 24 percent. On August 2, 2010, Arik Int’l requested that SH&E suspend its work, due to Arik Air’s decision to defer all of its delivery sl ots for 777-300ER type aircraft with Boeing to dates beyond January 2016, until further notice, and it requested SH&E send it an invoice for all outstanding payments. The same day, SH&E, e-mailed Arik Int’l a detailed description of the total outstanding expenses and fees, equaling approximately 46 percent

of the total fixed fee amount. This amount remains outstanding today, de spite extensive and repeated attempts by SH&E to obtain payment since Februa ry 2010, including multiple unreturned phone calls, emails, and a letter of September 10, 2010, from SH&E to Arik Int’l, informing it that the amount owed was still unpaid and warn ing Arik Int’l that it was in breach of its agreement with SH&E. On December 9, 2010, SH &E, through its counsel, sent a secondletter to Arik Int’l demanding payment for the outstanding amount due. This finally prompted a response from Arik Int’l, th rough its counsel. By e-mail correspondence, counsel for Arik Int’l promised payment of a significant “undisputed amount” of the total outstanding expenses and fees owed to SH &E by January 10, 2011. However, SH&E has not received any payment as of the date of th is filing. SH&E is un aware of any dispute surrounding the delayed payment and has made good faith efforts to obtain payment from

Arik Int’l. According to publicly available sources, Arik Air is also indebted to the Nigerian

aviation authorities and other government officials, and has experienced groundings of its

aircraft on numerous occa sions as a result thereof. 5 Relief Requested While SH&E understands that the Departme nt does not typically involve itself in commercial disputes, in light of the importance financial fitness plays on the ability of a carrier to conduct its operations, SH&E request s that the Department carefully scrutinize Arik Air’s financial fitness to hold foreign carrier permit authority and to withhold such authority until Arik Air demonstrates it has met all applicable requirements.

5 See , e

. g ., Domestic Airlines Grounded Over N2.5 Billion Debt , T HIS D AY , Dec. 21, 2010 (reporting that the Federal Airports Authority of Nigeria grounded Arik Air on December 20, 2010 for failure to reconcile its debts); Arik Air Issues Dud Cheques to NCAA , PMN EWS N IGERIA

. COM , Sept. 13, 2010 (reporting that Arik Air “paid over N21 milli on through cheques to NCAA [Nigerian Civil Aviation Authority] in the month of August 2010 but all of them were dishonoured”); Arik Airline Grounded Over N1.9 Billion Debt , D AILY T RUST , Sept. 2, 2010 (reporting that the Nigerian Airspace Management Agency (“NAMA”) grounded Arik Air on September 1, 2010, for unpaid debt; and providing that Arik owed NAMA N1.9 billion on domestic routes and $126,000 on international routes); Arik Air, Arumeni, directors indicted for money laundering , N IGERIAN T RIBUNE , July 19, 2010 (reporting that Arik Air, its chairman, and directors were indicted for money laundering, by the Economic and Financial Crimes Commission, which “investigated the company for tax evasion totaling N5 billion . . . ”); Arik, IRS Grounded, Resume Operation , D AILY T RUST , June 9, 2010 (reporting that Arik Air owed NAMA N1.8 billion on domestic routes and $126,000 on international routes, and that Arik and another airline were grounded for hours on June 8, 2010, for failure to pay their debt); Aviation Unions’ Threaten to Tackle Arik Over U.S. $1.5 Million Debt , D OW J ONES , Mar. 23, 2010 (reporting that Arik Air’s indebtedness to NAMA “stood at $1.5 million on En-route and Terminal Navigation Charges on the foreign operation . . . [and] on domestic operations stood at over N551 million . . . ”).Additional Considerations and Conclusion SH&E hopes that Arik Int’l will, in response to this pleading, acknowledge its responsibility to pay its out standing professional fees a nd expenses owed to SH&E. SH&E greatly appreciates the oppor tunity to provide this answer.

Respectfully submitted,

Kenneth P. Quinn Jennifer E. Trock Pillsbury Winthrop Shaw Pittman LLP 2300 N Street NW Washington, DC 20037 (202)663-8000 (202)663-8007 kquinn@pillsburylaw.com Jennifer.Trock@pillsburylaw.com February 24, 2011 Counsel for SH&ECERTIFICATE OF SERVICE I hereby certify that I have this 24th day of February 2011 served the foregoing document by email on the following persons:

Name O RGANIZATION Contact Evelyn D. Sahr C OUNSEL , A RIK A IR L IMITED esahr@eckertseamans.com John Byerly U.S. D EPARTMENT OF S TATE byerlyjr@state.gov John Allen F EDERAL A VIATION A DMIN

. john.allen@faa.gov Carl Nelson A MERICAN A IRLINES carl.nelson@aa.com Hershel Kamen C ONTINENTAL A IRLINES hkamen@coair.com R. Bruce Keiner C ROWELL & M ORING LLP (C ONTINENTAL ) rbkeiner@crowell.com

Sascha Van der Bellen D ELTA A IR LINES sascha.vanderbellen@delta.com Jeffrey Manley U NITED jeffrey.manley@united.com Genaro Pena H OUSTON I NTERCONTINENTAL A IRPORT genero.pena@cityofhouston.net Bradley Rubenstein P ORT A UTHORITY OF N EW Y ORK AND N EW J ERSEY brubinst@panynj.gov

/s/ Kristen E. Baker

____________ Kristen E. Baker