The irrefragable fact is that, no matter the Virgin Group pretences, they ran the airline aground; collapsed it and left unscathed. Thus, Virgin Nigeria, which the then President, OBJ, presented to Nigerians as in the best interest of our nation; an airline which the CEO, Conrad Clifford told the National Assembly in 2008 that by 2010, would acquire 40 aircraft and employ 6000 Nigerians collapsed, leaving an operational debt of N35.5billion in three years;
an operational debt profile which Nigeria Airways did not incur in the last 10years (1992-2002) to its unfortunate liquidation. Worst still, the Virgin Group left without adding any value to the industry, no trained manpower, no assets; aircraft or structures. The airline left us with so many lessons;
it was a victim of low capitalization, well masterminded immediate returns to the Virgin Group, incredible faulty financial engineering based on quick gain aspirations, internal stakeholder-wrangling and distrust, continuous non-application of due diligence in all deals, deception bothering on fraud, high profile impunity and opacity as well as utter disregard for indigenous professional patriotic advice.
In all, it is a classic lesson of how not to hand over our patrimony, without a national oversight, to a foreign investor whose ulterior interest is not known. In fact, Virgin Nigeria was not a national carrier by its equity structure, as claimed by its owners but a private Nigerian flag carrier put together by a two-some with a foreign investor and a façade of involvement of some selected few. It was an appropriation of our common wealth, simpliciter.
Nigerian Eagle – Capt. Olumide’s Rescue Airline (2009): Our Failed Attempts
When the Virgin Group left, it left a debt burden of US$250million, had placed an order of 10 Embraer models 170 and 190 worth US$450million and with an option of additional 6; all these when it had a negative capital and zero cashflow and one of its B737 that went for a C-Check was grounded in Europe for the airline’s inability to pay US$1.4million for the checks. For the first two Embraers billed for delivery in November 2008 and June 2009, UBA had to pay the needed deposit of US$25million as well as cover the 60% balance on the 190 model on delivery.
Kema Chikwe
Kema Chikwe
As at this time, Virgin Nigeria had not only become a burden to UBA, but a toxic asset. UBA’s “All-Asset-Debenture” was hollow as the debt-ridden and mismanaged airline had no asset since all its aircraft were on lease. The order of 10 Embraer was a smart move to create an asset base on which the Debenture would sit.
When Branson ordered and effected a pull out, the AOC of Virgin Nigeria was to be withdrawn by NCAA but for the spirited effort of the then Chief Operating Officer (COO) of the beleaguered airline, Capt Dapo Olumide, who quickly engaged Ethiopian Airline as technical partner. Olumide was eventually appointed Managing Director by UBA which, having inherited the airline’s total liabilities, literally owned the airline.
As at this time, Virgin’s liabilities had been transferred to UBA Capital to save the bank from the Lamido Sanusi gale blowing through the banks as the entire Virgin debt was unsecured. With an uncanny professional expertise and palpable commitment, Olumide engaged the challenges of the badly managed airline. He was determined to make a change; albeit, to leave a legacy.
Unfortunately, Olumide who neither understand nor has patience for intrigues, did not know that he was floating on a dense sea of intrigues whose outer layer was only a façade of normalcy. On transition from Chief Operating Officer to CEO, Olumide engaged a Nigerian Consultant to renegotiate the monthly block-hour lease rental of the five operational 737s and succeeded to reduce it from US$181,000 to US$125,000. He restructured the routes, re-jigged service delivery and installed financial prudence.
Olumide further negotiated the price of the Embraer from US$30million down to US$28million. To enable him drive the turnaround of the airline to a great end, sought a facility of US$70million from UBA without success. He had also tried to no avail to register the airlines new name of “Nigerian Eagle”. As at this time, Jimoh Ibrahim who was the Chairman of Corporate Affairs Commission, was already in discussion with UBA to buy over the airline.
His choice name for the airline was “Air Nigeria” which he was already working on without Olumide’s knowledge. The truth is that, as at the time the Virgin Group exited, UBA was no longer comfortable with their investment in the airline. All the bank wanted was to sell off the toxic asset.
Jimoh Ibrahim and his faceless colleagues were willing buyers. Olumide, who was driving the turnaround of the beleaguered airline with immense passion, only woke up one fateful day to hear that Jimoh Ibrahim had bought over the airline. It was then that Olumide realized that he was a mere transitory manager, ill-used and “abused” as it were, by an insincere owner/employer who had little or no regard for his effort, commitment and success.