US embassy cable - 05LAGOS1289

C O N F I D E N T I A L LAGOS 001289 
 
SIPDIS 
 
TRANSPORTATION FOR FAA 
 DAKAR PLEASE PASS TO FAA REP ED JONES 
 ROME PLEASE PASS TO TSA REP JOHN HALINSKI 
 
E.O. 12958: DECL: 08/03/2015 
TAGS: EAIR, EINV, PREL, NI 
SUBJECT: VIRGIN NIGERIA PLANS TO SEEK APPROVAL FOR DIRECT 
NEW YORK FLIGHT 
 
 
Classified By: CG Brian Browne for reasons 1.4(b) and (e). 
 
1. (C) Summary.  Virgin Nigeria (VN) soon plans to formally 
apply for a direct flight between Nigeria and the U.S. The 
airline sees New York, Chicago, and Houston, in that order, 
as the three most profitable routes. If approval is granted, 
VN hopes to begin operations by Christmas 2005. End Summary. 
 
2. (C)  During a July 29 meeting, VN's CEO, Simon Harford, 
told the Ambassador VN planned to apply within the next few 
weeks to the Transportation Department for U.S. operating 
authority. Harford acknowledged that, given the Nigerian 
business and aviation environment, launching VN had been at 
times a challenging endeavor, but VN, he said, was now 
seeking a positive way forward. Chevron,s MD for West 
Africa, Jay Pryor, who accompanied Harford to the meeting, 
confirmed the huge demand for a direct U.S. route.  Pryor 
also said that the pension fund of the Nigerian branch of his 
company along with those of other big U.S. firms operating in 
Nigeria are investors in VN. 
 
3. (C) Based on demand, New York would be VN's preferred port 
of call in the U.S., followed by Chicago then Houston. 
According to Harford, VN brings credibility and assurance of 
heightened airport security to Nigerian aviation. Previously, 
airport authorities have taken a "quick fix" approach to 
security concerns, but with VN's introduction to the market 
and a new aviation minister, more attention can be expected. 
 
4. (C) Harford actually lamented Continental's departure from 
the market because increased routing and service would 
ultimately help VN in their vision of creating a panafrican 
air transport hub in Lagos. VN has plans to open routes to 
Banjul and Douala in the upcoming weeks and then to 
Johannesburg by the end of the year. More domestic routes are 
also in the works. The airline is an estimated five years 
behind the market-driven demand for routes, but VN is 
cautious about expanding too fast lest they stretch their 
limited aircraft capacity and resources too thin. 
 
5. (C) The VN Board will not, for instance, approve any 
resource allotment to a direct U.S. route before there is 
some certainty regarding their application for operating 
authority. This has placed the airline management in a 
Catch-22 situation. It has slowed VN management in filing the 
application because the application process requires a rather 
detailed identification of aircraft types and resources to be 
eventually committed to the project. 
 
6. (C) At the same time as the meeting with the Ambassador, 
Harford subsequently told us that VN had representatives in 
Washington, DC to discuss their application with DOT and to 
make an appearance at Boeing, where they boasted to have $1 
billion available for immediate aircraft purchases. VN said 
it eventually plans to purchase approximately twenty-five 737 
aircraft or eight 787s. The airline currently has three 
aircraft, none Boeing.  It plans to buy four more before the 
end of the year, at a rate of one per month. 
 
7. (C) Comment:  Taken together, VN's actions amount to a 
"charm offensive." At the meeting with the Ambassador, for 
instance, VN was able, on the one hand, to bring a respected 
executive of a major U.S. company to attest to U.S. interest 
in a VN flight to America and, on the other, to profess 
non-involvement in Continental's travails through GON 
roadblocks. Prior to VN's launch, the GON had quietly made 
the case that the Open Skies agreement was unfair to Nigeria, 
which did not have a national airline at the time. For 
balance, any approval of a U.S. airline's direct route to 
Lagos would need to be accompanied by a Nigerian flag 
carrier's existence and ability likewise to receive an 
approval.  VN's assertion that competition from Continental 
would have been good for them is an attempt to distance 
itself from the GON's position.  Similarly, the 
window-shopping trip to Boeing is likely intended to recruit 
Boeing,s lobbying support for VN,s official application to 
fly to the U.S. End comment. 
 
8. (U) This cable has been cleared by Embassy Abuja. 
BROWNE