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Old 4th Aug 2006, 16:24
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Flying Touareg
 
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Virgin Nigeria May Protest Designation of Bellview, Others

from thisday:

There are indications that Virgin Nigeria Airways (VNA) may protest the designation of some domestic airlines on some of the international routes exclusively reserved for it by the Federal Government to attract investment into the airline.
In the Memorandum of Mutual Understanding (MEMU) in 2004 between the airline's core investor, Virgin Atlantic Airways (VAA) and the Federal Government, the New York, London, Dubai, Jeddah and Johannesburg routes had been exclusively reserved for seven and half years for Virgin Nigeria.
However, the Federal Government had about two weeks ago reportedly designated start-up airline, Arik Air, Bellview Airlines and Aero Contractors on some of the reserved routes.
THISDAY gathered from a Ministry of aviation source at the venue of the just concluded aviation conference in Dakar, Senegal that officials of the airline may formally protest the breach of the MEMU, just one year after the carrier commenced operations.
The source noted that government's decision to designate the airlines is indeed unsettling the airline's investors, many of whom were said to have been compelled to invest in the carrier largely because of the seven and half years exclusive right to the routes. Some of the investors, who are institutional investors, are said to be worried that government's action may indeed be a disincentive to investors in future if agreements reached are violated with impunity.
Although British entrepreneur, Sir Richard Branson whose Virgin Atlantic Airways is the core investor with 49 per cent equity in Virgin Nigeria is not known to have formally made any public comment on the Federal Government's stand, it is believed that he may make his position known soon.
It is however recalled that the route reservation policy did not get the blessing of the National Assembly when the airline was about to be set up but the Federal Government through the former Aviation Minister, Mallam Isa Yuguda went ahead with its inclusion in the MEMU that snowballed into the birth of Virgin Nigeria.
Since his assumption of office, the incumbent minister, Dr.Babalola Borishade has not hidden his resolve to jettison all policies that do not favour not only the country but domestic airlines.
To give practical _expression to that resolve, the government last month cancelled the three additional frequencies given to British Airways last year.
It was however gathered that in the case of Virgin Nigeria, Borishade had repeatedly assured that the government would keep its part of the agreement with the investors vis-a-vis route reservation.
In the MEMU, the government had undertaken " that as long as VAL remains the Strategic Investor in and/or VAA remains the Technical Partner to the Airline,it will designate the airline as flag carrier with the full benefit and advantages of such statuson the prime routes for which it has the right of first refusal to operate the available frequencies.
The prime routes referred to are: London, New York, Jeddah, Dubai and
Johannesburg; grant the Airline the right to operate,exclusively out of Nigeria in respect of the above prime routes for a period of seven years and six months from the date of commencement of the Airline's flight operations..."
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