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Richard Branson Deal Gone Wrong

Virgin Nigeria dumps Virgin Atlantic deal for Ethiopian Airlines

Lucky Onoriode George, eTN Ambassador  Aug 31, 2009

After several months of speculations and animosity, Virgin Nigeria has finally wound up its technical partnership with Virgin Atlantic Airways, owned by the global business mogul Sir Richard Branson, as the Nigerian flag carrier last weekend entered into a new Technical Service Agreement, TDS with one of the most successful airlines in Africa, Ethiopian Airlines to aid its operations henceforth.

Virgin Nigeria Airways and Ethiopian Airlines emerged as the first two African Airlines to sign a Technical Service Agreement covering training, maintenance and resource pooling, signaling a major boost in technical cooperation among African Airlines.

The agreement signed in Addis Ababa, Ethiopia, with the managing director of Ethiopian Airline, Mr. Girma Wake, and Capt. Dapo Olumide, chief executive officer, Virgin Nigeria Airways in attendance.

Both Girma Wake and Captain Dapo Olumide leading top managements of both airlines paid glowing tribute to the possibility of collaboration among African business and commercial interests, describing the TSA as the first effective action among African Airlines representing West and East Africa bloc.

Ethiopian Airlines with 34 wide-body aircraft and an order for another 36 made up of B787 Dreamliner and B777LR, last week posted a profit of $117 million [one hundred and seventeen million] in the face of Global financial losses of major American, European and Asian Airlines.

According to Captain Olumide after the ceremony at Ethiopian Airlines headquarters, the agreement shows "a paradigm shift that changes the way Airlines function. It also shows an audacity for Nigerian Airline to partner another African Airline, which by the way is more profitable than all European Airlines combined. This is completely unheard of in Africa."

He explained, "The maintenance of all our B737 Aircraft will be done with Ethiopian Airlines, but there are a host of other opportunities, which include training of our pilots, cabin crew, Engineers. They have a vast and extensive network in training. This is one African Airline that is actually bigger than most European companies.‚ÄĚ

Captain Olumide said the new TSA is part of a broad strategy that would ultimately signal the Airline's first step towards rebranding in name and work culture.

"All along, airlines in Africa do their training in Europe or America; we are going to do our training here, because Africa has come of age. We have seen what is going on in South African Airways, Kenya Airways and Ethiopian Airlines and we believe this is the future and we are moving on in that direction, this is in addition to the fact that it will reduce our costs significantly as well as make us more efficient. I am proud, this is a significant milestone," he explained.

Before the fall-out between Virgin Nigeria and Virgin Atlantic, the Richard Branson-owned British flag carrier had 49 percent of Virgin Nigeria, shares experts said worth a little above 10 percent in today’s market value and had find it difficult if not impossible to get buyers since Virgin Atlantic indicates its interest in divesting its shares.

Virgin Nigeria dumps Virgin Atlantic deal for Ethiopian Airlines

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