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 

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Docket No. OST-2010-0279 

 

Motion of SH&E for Leave to File and Answer of SH&E to Application of Arik Air 

Limited for Exemption Authority 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.com

 
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 

______________________________________ 

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Docket No. OST-2010-0279 

 

Motion of SH&E for Leave to File and Answer of SH&E to Application of Arik Air 

Limited for Exemption Authority 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 answer to the Application of Arik Air Limited for a Foreign Air 

Carrier Permit and Exemption Authority, 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 failure of its corporate parent, Arik Air 

International Ltd. (“Arik Int’l”),2 to pay significant outstanding professional fees and 

expenses owed to SH&E, which call into question Arik Air’s financial fitness. 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 requests that DOT verify the accuracy of Paragraph 

6 the Arik Application regarding Arik Air’s interest 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 Boeing 777-300ER aircraft, 

ordered by Arik Air from Boeing and scheduled for delivery beginning in early 2011. In 

this role, SH&E provided for Arik Int’l overall program management of the cabin interior 

for the Buyer Furnished Equipment, as well as technical advisory services and oversight 

of the Supplier Purchased Equipment managed by Boeing. SH&E’s responsibilities 

included: management and coordination on the cabin interior design, cabin service 

definition, product selection, sourcing, and detailed 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/racine_site/about_us.asp?page=ArikAir-International&id_sessionlangue=2). The agreement 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 regarding 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 installation integration. SH&E was to provide the 

above services for a fixed 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 schedule 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 assumptions in the agreement, resulting in 

scope of work additions and significant changes in the original delivery schedule for the 

aircraft from Boeing to Arik Air. This agreement 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 slots 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, despite extensive and repeated attempts 

by SH&E to obtain payment since February 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 warning 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 second 
letter to Arik Int’l demanding payment for the outstanding amount due. This finally 

prompted a response from Arik Int’l, through 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 this filing. SH&E is unaware 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 occasions as a result thereof.5 

Relief Requested

 While SH&E understands that the Department 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 requests 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, THIS DAY, 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, PMNEWSNIGERIA.COM, Sept. 13, 

2010 (reporting that Arik Air “paid over N21 million 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, DAILY TRUST, 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, NIGERIAN TRIBUNE, 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, DAILY TRUST, 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, DOW JONES, 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 outstanding professional fees and expenses owed to SH&E. 

 SH&E greatly appreciates the opportunity 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&E 
CERTIFICATE 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 ORGANIZATION Contact 

Evelyn D. Sahr COUNSEL, ARIK AIR LIMITED esahr@eckertseamans.com

John Byerly U.S. DEPARTMENT OF STATE byerlyjr@state.gov

John Allen FEDERAL AVIATION ADMIN. john.allen@faa.gov

Carl Nelson AMERICAN AIRLINES carl.nelson@aa.com

Hershel Kamen CONTINENTAL AIRLINES hkamen@coair.com

R. Bruce Keiner CROWELL & MORING LLP

(CONTINENTAL) 

rbkeiner@crowell.com

Sascha Van der 

Bellen 

DELTA AIR LINES sascha.vanderbellen@delta.com

Jeffrey Manley UNITED jeffrey.manley@united.com

Genaro Pena HOUSTON INTERCONTINENTAL 

AIRPORT

genero.pena@cityofhouston.net

Bradley Rubenstein PORT AUTHORITY OF NEW YORK 

AND NEW JERSEY

brubinst@panynj.gov

/s/ Kristen E. Baker____________ 

Kristen E. Baker