An unnamed Virgin source told Reuters that VNA would have until early July to rebrand itself, regardless of the denial of the story by its Spokesperson, Francis Ayigbe.
Virgin Atlantic is pulling out its brand name from and selling its stake in the national carrier, Virgin Nigeria Airways (VNA), the climax of the acrimony that has beset the deal struck in 2004 at the behest of former President Olusegun Obasanjo.
Ayigbe maintained that "nothing has changed, Virgin Atlantic still owns 49 per cent shares in Virgin Nigeria. They are getting it all wrong."
In 2004 Virgin Atlantic entered into a deal, brokered by Obasanjo, to take over as the national flag-carrier from Nigerian Airways which had collapsed amid corruption.
Virgin Atlantic paid $25 million for a 49 per cent stake, with Nigerian investors making up the rest.
VNA Managing Director Designate, Dapo Olumide, also reiterated that as at today, Virgin Atlantic still holds 49 per cent stake in VNA.
However, going by the word of a Virgin Atlantic source, "It is like the parent is now letting the child go off on its own.
Relations between Virgin Atlantic and the government soured after Umaru Yar'Adua became President in 2007.
In 2008 VNA was stripped of a special deal allowing it to operate domestic flights from the international terminal of the Murtala Muhammed Airport in Lagos.
While stunned passengers looked on, hammer-wielding men demolished their lounge.
Virgin Atlantic owner, Richard Branson, accused the government of using "mafioso tactics." In turn, the government accused Virgin Atlantic of "orchestrating negative propaganda."
In January, VNA announced it would stop flights on its loss-making Lagos-Johannesburg and Lagos-London routes.
Virgin Atlantic's flights to Lagos are to continue, but VNA is now likely to merge with another local carrier, the Virgin source said.
Nigeria Airway problems climaxed when the government demanded the return of some $400 million, which went missing from its accounts.
Details of an 18-month-old report into alleged corruption were made public in a White Paper.
Those ordered to return money included two former Ministers and former officials. One Minister allegedly sold two planes without authorisation.
After years of financial problems, Nigeria Airways went into liquidation with debts of $60 million.
Obasanjo in 2001 set up the inquiry into the activities of the airline between 1983 and 1999.
The report was presented in May 2002, but Obasanjo came under political pressure to reduce the scale of the sanctions or to protect some of those involved.
The investigation covered, among others, decisions taken by the top management, including the sale of Nigeria Airways House in London for half of its value.
Some employees were recommended to be banned from public office for 10 years.
Soon, fresh challenge arose, with politicians out to probe allegations over the sale of almost half the carrier to a company based in the United Kingdom.
Idris Ibrahim Kuta, then Senate Aviation Committee Chairman, called on the Ministry of Aviation to explain why it sold 49 per cent of the airline to a leasing company, Airwing Aerospace.
To get out of trouble, Virgin Atlantic was launched into a scheme to rescue the dying outfit plagued by corruption by signing a deal with the government to create VNA, to be jointly owned by Virgin Atlantic and Nigerian investors.
But the then Aviation Minister, Kema Chikwe, explained that "we are allowed to go into joint ventures," even though it was alleged that the sale was agreed without consultation with the Bureau of Public Enterprises (BPE), the agency in charge of privatisations.
VNA, co-owned by Brandson and Singapore Airlines with 49 per cent stake, operated domestic, regional, and international services, including flights to Europe and the U.S.