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Richard Branson Airline Deal

Goodbye, Virgin Nigeria; hello, Nigerian Eagle Airlines

Ikechi Uko, eTN Ambassador  Sep 18, 2009

The controversial relationship between Virgin Atlantic and its erstwhile Nigeria counterpart Virgin Nigeria has finally came to an end on September 17 at a well attended press conference at the VIP lounge of the Lagos Airport where the new name of the airline as Nigerian Eagle Airlines with a complete change of logo was unveiled by the airline’s managing director, Dapo Olumide.

The famous Virgin Livery has been changed to a stylized eagle with the word Nigeria written a unique font. Mr. Olumide explained that in arriving at the name Nigerian Eagle Airlines, extensive research into Africa’s rich culture and heritage were painstakingly conducted by a team of researchers. He noted that the eagle is a bird that typifies strength and foresight and it is common among Africans irrespective of their cultural affiliations.

Mr. Olumide, who is the former managing director of one of Nigeria’s most successful Airline Aero contractor and who was recruited to save a dying airline, announced the new chief operating officer (COO) is an Ethiopian, Kinfe Kahssaye, who is obviously from Ethiopian Airlines, the airline’s new technical partner signed on to replace Virgin Atlantic airline. The post was formerly occupied by a seconded staff of Virgin Atlantic airline.

Nigerian Eagle Airlines’ chief commercial officer is Mr. Jimmy Kibati, a Kenyan. The choice of Africans as replacement of the old team is part of the new philosophy of the new management.

According to Mr. Olumide, the future of aviation in Africa lies on alliances as opposed to unhealthy competitions among airlines in the continent. ‚ÄúNigerian Eagle Airlines is the first airline that has adopted the model by going into a landmark partnership with Ethiopian Airlines through the Technical Services Agreement (TSA) both airlines recently signed.‚ÄĚ

He praised the new partner, Ethiopian Airlines, as being bigger (more than twice the fleet size and double the route network) and richer (four times more profitable) than Virgin Atlantic and among the top 10 airlines in the world.

Nigerian Eagle Airlines will concentrate on the regional routes with its 7 aircraft that includes B737s and Embraer 190s. It plans to go long-haul within 5 years.
The relationship with Virgin Atlantic collapsed when the Nigerian institutional owners decided that the unending losses must cease and hired Olumide, who had retired from Aero contractor after 25 years of service and joined a development bank AFC. After taking office, he fired a third of the staff, stopped all loss making long-haul flights, returned the unprofitable B767 and streamlined the operations of the airline. He also ceased the payment of huge royalties to the Richard Branson- owned Virgin Atlantic.

The process of separation led to media accusations of ill intensions and mismanagement before the arrival on the new airline as a way out of the clutches of Virgin Atlantic.

Already, plans for a private placement to inject additional operational funds are underway for Nigerian Eagle Airlines, which is 51 percent owned by Nigerian institutional investors and 49 percent by Virgin Atlantic Airways Limited.

It is expected that Mr. Branson will soon divest of his interest in the airline. He was invited by the former president of Nigeria to help set up a world-class airline after the collapse of Nigeria Airways. The airline he set up was not profitable and was running up huge debts and the majority shareholders wanted a change.

Goodbye, Virgin Nigeria; hello, Nigerian Eagle Airlines

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