ANDREW CHUTER / ABUJA
The country's flag carrier was hit by huge financial losses under previous administrations
The Nigerian Government has asked Virgin Atlantic Airways to consider helping rescue ailing local flag carrier Nigeria Airways. The request came as Virgin boss Sir Richard Branson visited Nigeria to launch Virgin's new route between London Heathrow and Lagos.
The future of Nigeria Airways is being reviewed by the government as part of a wider policy of improving the position of civil aviation in Africa's most populous nation after years of neglect by previous administrations. Once one of the largest airlines in Africa, Nigeria Airways has been reduced by large financial losses to operating two Boeing 737-200s on regional routes.
UK carrier Virgin was made the offer when Branson met Nigerian president Olusegun Obasanjo to discuss several issues including an increase in frequencies on the route from four a week to seven. The Nigerians appear to have told Virgin it can eventually have the additional flights, but only if it also serves another destination - preferably Kano, the country's second biggest city.
Virgin Atlantic starts services to Lagos on 16 July with a Boeing 747-200, having recently been designated as the second UK carrier to serve Nigeria. Rival British Airways serves Lagos from London four times a week with a 747-400 and also runs three Boeing 767 services to the national capital Abuja. Although two Nigerian airlines are also designated for the route in a recently revised bilateral, none of their 14 frequencies are being used, causing huge undercapacity on the highly lucrative route.
Branson confirmed that Virgin had been approached with a request to consider helping revive Nigeria Airways, and while not elaborating on what was on offer did not dismiss the idea out of hand, although he said that "in my opinion they would be better off scrapping the airline and starting again."
A report last year by International Finance (IFC), the World Bank arm until recently acting as an advisor to Abuja on the privatisation of Nigeria Airways, gives some clues as to what may be on offer. IFC pulled out in May after a disagreement over the new government's open market policy, which it felt was diminishing the chances of a successful privatisation.
Before doing so, however, it presented options on how to proceed, including scrapping the airline and auctioning off the route rights; bringing in expertise to rebuild the operation based on key international routes ahead of privatisation; or going for a straight privatisation involving a strategic partner, domestic investors and the government.
Involvement in the privatisation could be limited by bilateral considerations, but it is also possible that the airlines could develop a joint venture operating Nigerian Airways frequencies between Lagos and London in much the same way as BA did before the tie-up was dissolved in March. Some analysts saw that deal, which partly involved using a BA aircraft painted in Nigeria Airways colours, as a way of providing funds to rescue the Lagos-based carrier. One Virgin executive described such a deal as "the option of last resort".
Nigerian civil aviation minister Kema Chikwe meanwhile says she expects to appoint new privatisation advisors soon. The minister also says she will set up a committee to consider bids from carriers to be designated as the second Nigerian operator on the London route. Bellview Airlines and Kabo Air are often mentioned as potential bidders, with the latter seemingly in a good position financially and having recently acquired five 747-100s.
Nigeria Airways reckons it will be back on the Lagos-London route next month operating a CIT Aerospace-owned 747-200 on a damp lease from Air Djibouti. The carrier has held slots at Heathrow since May for three services a week but has been cancelling them on a monthly basis. Yomi Jones, the airline's chief executive, says the 747 is being prepared by FLS Aerospace before starting services in August. He hopes to follow-up the London service by reinstating the Lagos-Dubai route.
Nigeria Airways' future is dependent on political decisions, but if the carrier gets the required financing, Jones plans to add McDonnell Douglas DC-10s, Airbus A310s and further 737-200s to the fleet, to service destinations such as Jeddah, Johannesburg and Nairobi.
Source: Flight International
