Why did FG pay $300m for 5% of start-up airline when $286m was paid for 31% of Virgin Atlantic?

The Federal Government’s decision to buy a five per cent holding in the national airline, Nigeria Air, has set off a debate on social media.
A simple, but numbing question from the former chief executive officer (CEO) of the Assets Management Corporation of Nigeria (AMCON), Mr. Mustafa Chike-Obi, triggered The debate, which many viewed as suggestive of an alleged fraudulent to short-change the government.
On his Twitter handle, Mr. Chike-Obi wrote: “Am baffled.Air France/KLM paid 286 million dollars for 31% of Virgin Atlantic last year, but we are putting up 300 million dollars for 5% of a start-up airline?? Would really appreciate a rational explanation.”

His comments equally set off a rash of comments, but none addressed his concerns. Many raised the issue of corruption in government.
Aviation officials refused to be drawn into the growing controversy at the weekend, but a director was optimistic a detailed response will be made by government as soon as possible.
Recall that early in the week, the Minister of State for Aviation, Senator Hadi Sirika, revealed the branding and livery for a new national Flag Carrier Nigeria Air due to be launched at the end of this year.
According to a statement from Sirika’s office by the deputy director (Media and Public Affairs) in the Ministry of Transportation (Aviation), Mr. James Odaudu, the ‘unveiling’ was attended by a cross section of the international Press, Nigerian dignitaries, stakeholders, aircraft manufacturers, prospective investors and a Nigerian government delegation including S. Zakari, Permanent Secretary Federal Ministry of Transportation, Senator Adamu Aliero, Chairman, Senate Committee on Aviation, and Hon. Nkeiruka Onyejeocha, Chairperson, House Committee and included a short film showing an aircraft with the new Nigeria Airlivery.
Senator Sirika said “I am very pleased to tell you that we are finally on track to launching a new national flag carrier for our country: Nigeria Air.  We are all fully committed to fulfilling the campaign promise made by our President, Muhammadu Buhari in 2015.  We are aiming to launch Nigeria Air by the end of this year.”
Sirika thanked the Transaction Advisers, led by AMG, and the special Task Force, who, he said, worked diligently to achieve the results so far and overcome the challenges involved.
The minister added: “We obtained the Certificate of Compliance from the Nigerian Infrastructure Concession Regulatory Commission (ICRC) two weeks ago and can now go into the investor search. I am confident that we will have a well-run national flag carrier, a global player, compliant to international safety standards, one which has the customer at its heart. We hope to establish an airline that communicates the essence of our beautiful country, an airline we can all be proud of.”
“Following extensive market research, the branding of our new airline, Nigeria Air, demonstrates a true flag carrier of our nation, soaring through the skies in the shape of our nation’s eagle.”
Odaudu’s statement said further: “The branding and naming of the new national carrier comes on the back of a social media campaign undertaken under the auspices of The Ministry of Transportation (Aviation) which invited Nigerian youth and students for their input and creativity to come up with a name for the new Nigerian flag carrier. The Facebook page and websitenameyourairlinenigeria engaged over 400,000 people up until the deadline for submissions, which was on 25th June 2018.
“In addition, detailed and extensive market research was commissioned by the Ministry of Transportation (Aviation), which involved focus groups across Nigeria and over 100 interviews with aviation stakeholders and professionals, politicians, Nigerian business owners, students and a broad spectrum of people across Nigeria.
“The research concluded that Nigeria is a proud nation with diverse populace, a strong cultural heritage and a people that are hungry for a unifying national flag carrier.
“The Ministry of Transportation (Aviation) is also currently running an aviation road map that includes airport concessions, Aerotropolis, an aircraft Maintenance, Repair and Overhaul (MRO) Center, agro allied terminals, the National Carrier and an aircraft leasing company.
“The Nigerian Government will support the launch of the new flag carrier with viability gap funding, in a Public Private Partnership (PPP) arrangement to deliver a national flag carrier, guided by the international ICAO standards, that will stand the IOSA audit from the start, and lead to a fast IATA membership for international operation.
“He assured Nigerians and the international community that government had learnt a lot of lessons from the experience of the defunct Nigeria Airways, and now determined not to repeat the mistakes that led to its demise. This, he said, informed the decision to take the Public Private Partnership (PPP) approach.
“He explained that the unveiling of the airline at the Farnborough International Airshow was cognisant of the fact that being the largest congregation of global aviation industry players, the event affords the best opportunity to market the airline to prospective investors and register it in the minds of all stakeholders ahead of its formal launch billed to take place in Abuja before the end of the year.”