Branson’s Virgin to launch Nigerian airline

LONDON – Richard Branson’s Virgin Atlantic Airways [VA.UL] announced an agreement with Nigeria yesterday to set up a new airline following the collapse of the African nation’s flagship carrier last year.

The new airline, to be named Virgin Nigeria, will have an initial investment of US$50 million (N$325 million) with Nigerian institutions taking 51 per cent and Virgin Atlantic owning the remaining 49 per cent. The carrier will operate separately from Virgin’s existing services to the United Kingdom and is expected to fly domestic, regional and offshore routes from early next year.”All of us at Virgin are honoured and excited to be selected by the Nigerian government to play a role in creating a new 21st century airline for Nigeria’s 33 million people,” Branson said in a statement.Branson and Nigerian President Olusegun Obasanjo were scheduled to meet in Lagos on Tuesday to announce the deal formally.The agreement, flagged by the Nigerian government last month, follows the collapse of Nigeria Airways last year after accumulating debts of US$60 million.It will give Virgin a foothold in Africa.Nigerian institutions will be offered shares in the carrier through a private placement to be completed before the launch.Virgin said it planned eventually to float the carrier on the Nigerian stock exchange.Branson said the carrier would create 20 000 new jobs indirectly via its suppliers and partners and at Lagos airport.Virgin Nigeria plans to fly domestic routes within Nigeria, regional routes to Africa, and international destinations including the Middle East, United States and Europe.Virgin Atlantic, which announced plans last month to double its fleet with US$5,5 billion of new jets, is 49 per cent owned by Singapore Airlines Ltd Virgin Group owns listed low-cost airlines in Belgium and Australia and is setting up a low-cost carrier in the United States.Branson is also eyeing opportunities to expand his airline empire in China and India.-Nampa-ReutersThe carrier will operate separately from Virgin’s existing services to the United Kingdom and is expected to fly domestic, regional and offshore routes from early next year.”All of us at Virgin are honoured and excited to be selected by the Nigerian government to play a role in creating a new 21st century airline for Nigeria’s 33 million people,” Branson said in a statement.Branson and Nigerian President Olusegun Obasanjo were scheduled to meet in Lagos on Tuesday to announce the deal formally.The agreement, flagged by the Nigerian government last month, follows the collapse of Nigeria Airways last year after accumulating debts of US$60 million.It will give Virgin a foothold in Africa.Nigerian institutions will be offered shares in the carrier through a private placement to be completed before the launch.Virgin said it planned eventually to float the carrier on the Nigerian stock exchange.Branson said the carrier would create 20 000 new jobs indirectly via its suppliers and partners and at Lagos airport.Virgin Nigeria plans to fly domestic routes within Nigeria, regional routes to Africa, and international destinations including the Middle East, United States and Europe.Virgin Atlantic, which announced plans last month to double its fleet with US$5,5 billion of new jets, is 49 per cent owned by Singapore Airlines Ltd Virgin Group owns listed low-cost airlines in Belgium and Australia and is setting up a low-cost carrier in the United States.Branson is also eyeing opportunities to expand his airline empire in China and India.-Nampa-Reuters