Virtual startup Cally Air (Calabar) is at risk of being grounded barely a month after it started operating with its shareholder, the Cross River State government, saying it has been unable to withdraw the cash needed to pay for the insurance and maintenance of its aircraft, local media report.

The airline, operated by Aero Contractors (N2, Lagos) on behalf of the Cross River state, only began operations on July 15 on routes between Lagos, Kano, and Abuja with two B737-300s.

However, State Commissioner for Aviation Jake Otu-Enyia has told local reporters his administration has been unable to draw funds deposited in an unnamed commercial bank in order to pay for the insurance and maintenance of the aircraft. “Cally Air is at the risk of being shut down because we are unable to get money from the bank to renew our insurance and do maintenance of our aircraft as its standard practice and instructions from the NCAA (Nigerian Civil Aviation Authority),” he said.

Neither operator, Aero Contractors, nor the NCAA, were immediately available for comment.

Otu-Enyia was speaking to local newspapers while he and his staff were staging a protest at the entrance to the bank in Calabar. He claimed the bank was deliberately frustrating the state’s efforts to withdraw its funds. “We have been here since last week trying to withdraw our money from this bank. They keep telling us 'come tomorrow' and all that. We took this action because we need the money for the servicing of our aircraft and to complete the renewal of our insurance, otherwise, our aircraft will be grounded. The ministry is not asking for a loan; we came to withdraw our money and nobody is telling us why we cannot withdraw our money,” Otu-Enyia said.