|Quoting AA1818 (Thread starter):
Hi, I was curious to find out how VSNigeria was doing? Profitable?
What is their fleet, destinations, domestic market share, main competitors?
Are they bigger than Arik Nigeria which just bought 777s and 787s (or at least was rumoured to have done so as a UFO).
The carrier was formed in September '2004 and launched services on June 28 2005. Technically VK
is still in a launch/consolidation mode. They have recorded some neat strides especially on the domestic front, where they are the leading carrier. Internationally they face more challenges in the form of inconsistent govt. policies (and some would even say betrayal on the govt's part, since Arik, Bellview, and Aero were granted route rights to the UK which contradicts the MOU between Virgin Group and the Nigerian govt.). Network-wide the load factors are slightly above satisfactory. However, they are not yet in profitable water. They made it clear to their shareholders (Nigerian institutional investors 51%, and Virgin Group 49%) that 2007 is cost-cutting and consolidation year as to become profitable before 2008 - when an IPO on the Nigerian Stock Exchange is planned. Moreover all capital investments were put off recently until after the outcome of the elections (May 29) to reduce exposure and othe risks.
The IPO will allow the carrier to raise badly-needed funds to upgrade its product from lounges to acquisition of brand-new planes.
Fleet-wise, as at May 15th this year they will operate:
2 x 767-300ERs damp-leased from LAT Charter
7 x 737-300 all dry-leased from GECAS
1 x Fokker 50 wet-leased from Denim Air
There are immediate plans to add another Fokker-50, possibly to increase Port Harcourt services and open a new route to Warri. I don't know if VK
is planning to announce any serious long-term fleet strategy this year. However and in light of Arik Air's agressive progress, I wouldn't be surprised if VK
reacted with a tentative plan to lure passengers and keep them faithful. Speaking of faithful, they managed to release details of Eagleflier, their FFP. I expect Eagleflier to be somehow tied to Virgin Atlantic's FFP soon.
Current destinations from Lagos:
Abuja, Port Harcourt (NAF Base), Calabar, Kano, Sokoto, Accra, Dakar, Douala, Johannesburg, London Gatwick.
Stations for opening in 2007:
Abidjan, Monrovia, Libreville
Dubai (suspended in 2006).
The single largest hindrance to addition of destinations is the lack of air crew. In fact, it might be the largest operational challenge for VK. It's only recently that the local flight college in Zaria resumed pilot training, after decades of neglect. Expatriates are reluctant to work in Nigeria, for obvious reasons. We can safely assume that VK will continue to wet-lease at least until 2009!
Having followed VK
developments closely since their inception, I think they aren't doing bad at all, in light of the unstable political situation, Nigerian infrastructural challenges, and so on.
Finally, I think it's tempting to compare Arik's progress with that of Virgin Nigeria, since they are both based in LOS
and are relatively embryonic carriers. But consider that the a lot of mystery surrounds Arik's equity capital, and the airline recently came under scrutiny by the Nigerian Economic and Financial Crimes Commission, who might soon publish evidence that the real owner of the airline is a corrupt, highly-placed state Governor. I shall same no more.
PS. Something interesting to watch are the events post April 30 - a deadline imposed by the Nigerian CAA for all Nigerian airlines to recapitalize upwardly or else have their AOC revoked. A significant number of "briefcase"domestic airlines in Nigeria will not be able to survive and yes, VK stands to benefit!
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