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IN the estimation of Airline Operators of Nigeria (AON), the proposed national flagbearer, Virgin-Nigeria is on a "deadly mission" to ruin the nation's aviation industry. Hence, the urgent need for Federal Government to intervene to avert the impending consequences.
IN the estimation of Airline Operators of Nigeria (AON), the proposed national flagbearer, Virgin-Nigeria is on a "deadly mission" to ruin the nation's aviation industry. Hence, the urgent need for Federal Government to intervene to avert the impending consequences.
The airline operators' claim is contained in a petition to the President in which they allege that Virgin-Nigeria lacks a Certificate of Incorporation, and that its plan to commence domestic operations this week is a "predatory practice," where Nigerian operators already have excess capacity of N28 billion annually.
However, the Chief Executive Officer of Virgin-Nigeria, Mr. Simeon Harford stated that the airline would commence operations from the international wing of the Murtala Muhammed Airport, Lagos to Port Harcourt and Abuja airports.
This, according to him, is part of the programmes of the airlines aimed at decongesting internationally, flights for Nigerian passengers.
Besides, officials of the Ministry of Aviation stated at the weekend that there was nothing strange in Virgin-Nigeria opting to start its operations either locally or internationally, "because the Memorandum of Understanding (MoU) entered into by the government with Virgin Atlantic (the strategic investor in Virgin-Nigeria), has provisions for both routes."
The officials insisted that "Virgin-Nigeria airline has its equity shares capital of 51 per cent owned by Nigerians with only 49 per cent to Virgin Atlantic, which makes the airline more of an indigenous than a foreign firm."
They said this was one reason why Virgin-Nigeria has named Mr. Felix Ohiwerei, an industrialist, as its chairman.
But the operators punctured this argument, citing the ban clamped by the US Federal Aviation Authority on Virgin Atlantic's rights to use Virgin-Nigeria for operations into that country on the reason that "Nigeria does not hold substantial ownership of the venture."
In the petition to the Minister of Aviation, Mallam Isa Yuguda and copied to the President, Vice-President, Chief of (Naval) Staff, House of Representatives Committee on Aviation, Senate Committee on Aviation and Special Adviser to the President on Aviation; the operators said there were other inconsistencies in the new airline changing its original arrangement.
The Guardian gathered that the airline operators decided to petition the government on learning of the plan to announce a "slight change" in the original flight programme of the new airline.
In a letter dated March 16, and signed by Dr. Steve Mahonwu (chairman) and Captain Mohammed Joji (secretary general), the AON alerted the Presidency of some misgivings in allowing the airline to commence local operations "on a route that is already choked."
The operators said there were other discrepancies inherent in changing the original arrangement, which was to designate the new national carrier to compete with other operators in the international routes such as London, Dubai, South Africa and the United States.
They said Virgin-Nigeria could not meet the aspirations of Nigerians, the needs of growth and development of the country's aviation industry, nor address legitimate fears expressed by the domestic sector, representing a N30 billion contribution to the gross domestic product of the Nigerian economy and over 10,000 Nigeria jobs.
According to them: "If in spite of all the warning by numerous stakeholders, industry experts and Nigerian public, this unpopular Virgin-Nigeria deal would still be rammed down our collective throats, the least that well-meaning Nigerians can do is to keep close scrutiny on all aspects for procedural decency and business equity."
The document enumerated some flaws inherent in the arrangement that gave birth to the airline:
Six months after the MoU was signed on September 1, 2004, the promoter of the new airline has no Certificate of Incorporation but possesses an Air Transport Licence (ATL) of the defunct Nigerian Eagle.
The insistence of Virgin (Atlantic) to commence with domestic/regional operations is to secure cabotage rights from all Nigerian BASA to feed its own worldwide network.
Its domestic flights will also operate out of Murtala Muhammed International Airport - largely idle during the day and could easily accommodate Nigerian Airlines - will provide undue advantage against the existing Nigerian airlines, which have been denied access to the facility.
The airline operators also revealed that Virgin applied for slots to Gatwick in London instead of Heathrow, which is obviously the more attractive slot. They argued that the airline should have applied for 14 frequencies on behalf of Virgin-Nigeria to Heathrow in order to reciprocate the BASA.
Other reasons why the new airline was drawing the flak of the local operators, according to their letter, included the condition stipulated by government on "wet lease operation" for start-up outfits in Nigeria.
"This is contained in the current aviation policy but regrettably Virgin-Nigeria will be starting with wet lease (a more expensive finance option) thus depriving Nigerians the employment opportunity highly desirable from starting the business.
"Nigerian Airlines are excluded from participating in the Initial Public Offer (IPO) as clearly published in the "The Guardian " Newspapers of Wednesday December 22, 2004; quote 'The private placement will only be open to a selected number of qualified Nigerian institutional investors excluding airlines registered in Nigeria by NCAA.'
" Conversely, growth through partnership encouraged through NEPAD suggests that Virgin Airways should buy into Nigerian Airlines and not otherwise; there are investors on ground for upwards of 10 years.
The petitioners said government is weaning Virgin-Nigeria contrary to its privatisation policy, in the same environment in which domestic operators were forced to pay as much as N60 million as fees for being designated on unviable secondary routes.
They asked: "Why did government choose to subsidise a wholly private business venture when the spirit of NEPAD and NEEDS admonished of business enterprises?
"Nigerians are aware that the greatest need for a flag carrier was in providing lasting solution to the perennial problem of over-booking and stranded international passengers on such major routes as London, New York, Jeddah Dubai, and Johannesburg, etc."
They contended that Virgin wanting to commence domestic operations, Nigeria would continue to have neither a national airline nor flag carrier along the so-called reserved routes. Noting that Virgin-Nigeria has seven years exclusivity rights on these routes, they said the country has also jeopardised its rights on double designation to and from UK to satisfy the desire of Virgin Group at the expense of Nigeria.
"Let Virgin Group be told that another domestic player is not the priority of Nigerians. Our priority is an international airline especially along the London and other European routes where foreign airlines have continued to worsen the capital flight scenario, our balance of trade and thus weakening our national currency.
"It would seem, therefore, that only Nigerian carriers are denied the opportunity fly the so-called reserved routes. If Virgin Group is serious in floating a viable flag carrier it would have started with the London reserved routes, but Virgin is shy of competing with itself," they said.
The petitioners noted that Virgin applied for slots to Gatwick, which is less attractive than Heathrow slot, stressing that in retrospect, Virgin should have applied for 14 frequencies on behalf of Virgin-Nigeria Limited to reciprocate BASA signed between UK and Nigeria.
They said: "Nigeria can successfully reciprocate by designating two airlines at seven (7) frequencies each along the London route (14 weekly flight by UK and Nigeria respectively).
"Borrowed frequencies should be withdrawn. This will not dilute the London market because demand capacities still exist on the route. The question is why has Nigeria refused to take this bold step?"
The operators said they "sincerely hope and believe that prompt attention will be paid to the matters arising (as the government did in the past) to avert the consequences enumerated.