LAGOS, Nigeria (eTN) – Virgin Atlantic, majority shareholder and core investor in Nigeria’s flag carrier Virgin Nigeria, is set to de-invest is shareholding in the airline.
Virgin Atlantic recently said that it was reviewing its 49 percent minority shareholding in Virgin Nigeria, adding that talks with potential buyers were in progress.
President of Virgin Atlantic, Richard Branson, in a statement comically said that Virgin Atlantic was not dumping Virgin Nigeria; but rather, the intention was to revert the airline ownership wholly to Nigerian investors.
He recalled that Virgin Atlantic bought 49 percent stake in Virgin Nigeria four years ago, adding that over the period, it had helped the airline to become “the safe, reliable flag carrier for the region and had helped to lay good foundation for Virgin Nigeria’s continued success.”
The Virgin Atlantic boss stated further that it was regrettable that events have caused a review of its stake in Virgin Nigeria and wondered if it was appropriate that the Virgin brand should remain linked with the unprofitable Nigerian flag carrier.
According to Branson, Virgin Nigeria has had no financial benefit from Virgin Nigeria in respect of lease, rental or facilities during the period, adding that instead, Virgin Nigeria has benefited from highly attractive lease rates offered to Virgin Nigeria. However, the airline operations remained in the red.
Despite the aforementioned benefits offered Virgin Nigeria by Virgin Atlantic, the airline was still unable to pay royalty fees payable for the use of the Virgin brand since it began operations.
While it remains a puzzle and incomprehensible that most of the profitable Nigeria Airways routes ceded to Virgin Nigeria are not effectively covered by the airline but lost more grounds to British Airways and Virgin Atlantic on the Lagos-London routes.
The Lagos-London and Abuja-London routes are so profitable that British Airways is asking for more slots for its fourteen inbound and outbound respectively weekly and that of Virgin Atlantic seven inbound and outbound weekly flights, while Virgin Nigeria can barely function on the route effectively.