Nigeria's new national carrier, part-owned by Richard Branson, will not be permitted to operate direct flights into the United States because of Britain's anti-competitive aviation policy, the News Agency of Nigeria (NAN) reported on Friday.

The new carrier, Virgin Nigeria, which is due to begin operations early next year, has drawn initial investment of USD$50 million, with Nigerian institutions taking 51 percent and Virgin Atlantic the remaining 49 percent.

The news agency quoted a US diplomat as saying that given the big interest of the UK-registered carrier in the new airline, it would be unfair to permit Virgin Nigeria to benefit from the US-Nigeria open-skies agreement signed in 2000.

"We made our concerns known to both Virgin Atlantic and to the Nigerian government well in advance of the conclusion of the partnership creating Virgin Nigeria," Joseph Gregoire told reporters in the Nigerian capital Abuja on Thursday, according to NAN.

Gregoire said the UK had repeatedly failed to open the London market to additional US airlines, adding that Virgin Atlantic had been vocal in urging its home government to lock out American airlines.

A spokesman for Virgin Atlantic said that Virgin Nigeria had not yet formally applied to the US aviation authorities for clearance to schedule flights to the United States but the airline was confident it would get a permit.

"Virgin Nigeria is confident that as a majority Nigerian owned airline it will be able to operate under the jurisdiction of the bilateral air services agreement the Nigerian government has in place with a number of countries including the United States."

The Nigeria-Virgin deal followed the collapse of Nigeria Airways last year under debts of USD$60 million.

Virgin Nigeria has planned to fly domestic and regional routes to Africa, and international destinations including the Middle East and Europe. It will also service the highly profitable Lagos to London route.

A US ban would mean that Virgin Nigeria would lose the lucrative Lagos to New York route, which on Wednesday Continental Airlines was given approval to service.

The US carrier said flights on the route would begin in the second quarter of 2005, making it the only American airline to offer scheduled passenger service to six continents.

(Reuters)