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Virgin Nigeria begins local, west coast operations next year
By Wole Shadare,
Aviation Reporter
FOLLOWING the United States, (U.S.) decision to prevent Virgin Nigeria Airline (VNA) from flying into that country from Nigeria due to what it termed the control of VNA by Virgin Atlantic, the Nigerian flag carrier is to begin operations early next year with domestic and west coast flights, it was learnt yesterday.
Sources however said initial services will be operated on the domestic Lagos-Abuja route, with Kano and Port Harcourt coming up later in the year. It was gathered that planned international and regional destinations will include Abidjan, Accra and Dakar while services to Europe, the Middle East and the U.S. would come after all outstanding issues have been sorted out with the U.S. authorities.
Virgin Nigeria Airline was initially slated to begin operations on October 1, 2004, but the inability of the Federal Government and the Virgin Atlantic's owner, Richard Branson to tidy up the deal led to a shift in the take-off date of the airline. After the Memorandum of Mutual Understanding (MMU) was signed in October by both parties, a new date of January 2005 was fixed for the inaugural flight of the airline.
The director of the Office of International Aviation in the U.S. Department of Transportation, Mr. Paul Retch, had reportedly said the U.S. would block any plan by Virgin Nigeria to start services into would be country from Nigeria, on the grounds that the carrier would be deemed to be under the control of Virgin Atlantic.
This, according to Retch, would be a breach of the bilateral air services treaty between Nigeria and the U.S., which stipulates that national carriers of two countries must operate such services. However, recently Rite Time/World Airways from the U.S. operated from the U.S. into Nigeria without any reciprocal flight from Nigeria.
The Operations Manager, Chanchangi Airlines, Alhaji Muhammed Tukur said that the entry of Virgin Nigeria into the domestic route will ginger competition. He stressed that airlines that cannot compete favourably will fizzle out.
His words: "We are aware that VNA will operate the domestic routes. There is no need for fears about it". On the absence of reciprocity from the U.S. authorities that allegedly put paid to the airline's plans to fly from Lagos into the U.S., Tukur simply said, "it is all government's issue, they have to look at the problems and solve them". However, under the latest arrangement, as announced by the Minister of Aviation, Mallam Isa Yuguda, the airline would have an equity of $50 million. The strategic investors are to have 49 per cent equity amounting to $25.5 million, while Nigerian institutional investors are to hold the remaining 51 per cent amounting to $25.5 million.
Half of the equity shares meant for Nigeria, would be divested to the people through initial public offer, according to Yuguda.
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