Department of transportation washington, D. C
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VNA-006 Aircraft Fleet ACMI Leases
Dry Leases
* When delivered into country. VNA-007 Additional Details Concerning Leasing Arrangements ACMI-lease agreement with BH Air for 2 Airbus A320-200 Virgin Nigeria Airways is currently leasing, on an ACMI basis, from BH Air, two Airbus A320-200 aircraft. During the lease period, BH Air is responsible for the technical operation of the aircraft and the safe performance of flights. It therefore retains operational control and possession of the aircraft. BH Air also ensures that the aircraft are operated at all times in accordance with the provisions of each of Virgin Nigeria’s operational licenses, the requirements of the Aviation Authorities of Nigeria and Bulgaria, GE Commercial Aviation Services (Head Lessor), all applicable laws and standards of BH Air as set out in its flight operations manual. As soon as they complete their training, Nigerian cabin crew employed by Virgin Nigeria have replaced the BH Air cabin crew except for the purser role, which is a BCAA safety requirement. BH Air also conducts cabin crew training, and training for Virgin Nigeria’s ground operations staff to utilize BH Air’s operations systems. These staff are then qualified to operate BH Air’s equipment with, and eventually, without on-board supervision from BH Air. Virgin Nigeria is already well advanced in securing its own crew and maintenance capabilities in order to transfer wet leases to in-house operations (“dry leases”). BH Air is also responsible for providing maintenance and insurance for the aircraft. ACMI-lease agreement with Virgin Atlantic Airways for Airbus A340-311 Virgin Nigeria Airways is currently leasing, on an ACMI basis, from Virgin Atlantic Airways, an A340-311 aircraft. During the lease period, Virgin Atlantic is responsible for the technical operation of the aircraft and the safe performance of flights. It therefore retains operational control and possession of the aircraft. Virgin Atlantic also ensures that the aircraft are operated at all times in accordance with the provisions of each of Virgin Atlantic’s operational licenses, the requirements of the Aviation Authorities of Nigeria and the United Kingdom, all applicable standards and practices of Virgin Atlantic as set out in its flight operations manual. During the term of the lease, Virgin Atlantic provides its own employees and bears the cost of a sufficient number of qualified and licensed aircraft type-rated flight crew and cabin crew for the operation of the aircraft and the flights. For each flight, Virgin Atlantic provides flight crew and cabin crew which consist of one captain and one first officer and a minimum of 12 cabin crew. Virgin Atlantic is also responsible for ensuring that the aircraft is airworthy, serviceable and equipped for commercial airline operations with all systems functioning in accordance with their intended use and in good operating condition and has a valid and current certificate of airworthiness from the UK CAA and any other licenses, certificates and consents required from the aviation authorities in relation to the mechanical operation of the aircraft and has onboard the official documents for the operation of the aircraft and the carriage of passengers, baggage, cargo and mail on the flights. Virgin Atlantic is responsible for ensuring that the aircraft is maintained, overhauled, repaired, and operated and any parts replaced as necessary without undue delay and in accordance with the requirements of the UK CAA, NCAA, any other relevant aviation authorities and with Virgin Atlantic’s approved maintenance program; Furthermore, Virgin Atlantic shall, at its own cost and expense, maintain in full force and effect during the lease a policy of Comprehensive Airline Liability Insurance (Aircraft Third Party Liability Insurance and General Third Party Liability Insurance), excluding passenger, baggage, cargo and mail liability, for a combined single limit of no less than $1 billion any one accident or series of accidents arising out of one event (including to the extent available War and Allied Perils as detailed in the War, Hijacking and Other Perils Exclusion clause AVN48B or any modification or substitution thereof for the time being in force). Virgin Atlantic is also responsible for Hull Risk insurance for loss or damage to the aircraft. The aircraft intended for service to the U.S. will be on an ACMI lease from Virgin Atlantic and therefore will be maintained by Virgin Atlantic in the U.S. The maintenance program for the aircraft will be approved by the United Kingdom’s CAA encompassing scheduled maintenance and on-condition maintenance of the airframe, engine and parts. The Federal Government of Nigeria is a contracting State to the Convention on International Civil Aviation. Virgin Nigeria has an ACMI lease agreement with Virgin Atlantic which affects its proposed service to the U.S. This agreement is described earlier. In addition, on September 1, 2004, the Nigerian government selected Virgin Atlantic as the technical partner for Virgin Nigeria following months of audits and due diligence by technical advisors hired by the Ministry of Aviation. The resulting shareholder, brand and technical services agreements give the technical partner the ability to recommend certain key officers to the Board and to audit the airline to ensure its safety. This is necessary because some required skills are not currently available in Nigeria. High quality non-Nigerians have been recommended and hired for the positions of Chief Executive Officer, Chief Operations Officer, and Chief Financial Officer. This will help facilitate safe aviation practices. The non-Nigerians are explicitly required to seek a Nigerian to replace them as part of succession planning and the Human Resources Department will hold each of them accountable for this as part of their annual performance review process. The 51:49 equity structure was designed to ensure that the technical partner has a financial stake in the resulting flag carrier and will remain committed to ensure that the highest level of technical expertise and safety is provided to Virgin Nigeria. VNA-008 Financial Statements Profit and Loss AccountFor the period 7 January 2004 to 28 February 20052005 $’000
Direct cost - GROSS PROFIT - Operating expenses (5,670) Taxation - LOSS FOR THE YEAR AND ACCUMULATED DEFICIT, end of period (5,670) Loss per share $ (1.13) Balance SheetAt 28 February 20052005 $’000
CURRENT ASSETS Accounts receivable 37 Prepayments and other receivables 492 529
CREDITORS: Amounts falling due within one year (6,574) NET CURRENT LIABILITIES (6,045) NET LIABILITIES (5,633) CAPITAL AND RESERVES Share capital 37 Accumulated loss (5,670)
SHAREHOLDERS’ DEFICIT (5,633) Statement of Cash FlowsFor the period 7 January 2004 to 28 February 20052005 $’000
Operating loss before working capital changes (5,670) Working capital changes 6,045 Net cash outflow from operating activities 375 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (412) CASH FLOWS FROM FINANCING ACTIVITIES Issue of share capital 37 Net cash inflow from financing activities 37 NET INCREASE IN CASH AT BANK AND IN HAND, DURING THE PERIOD -
CASH AND CASH EQUIVALENTS, end of period - Statement of Chief Financial Officer regarding 2004/5 Financials. 
VNA-009 Traffic Forecasts
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