By Lateef Adegbite
When Air Peace , one of the most prominent Nigerian based airline operators which currently has over 20 Aircrafts on its fleet including Airbus 320 and 20-200 and Boeing 737-800 series secured the Foreign Carrier Operator Permit and Third country Operator Permit, to fly to Europe and he United Kingdon, UK, in November, 2023, the Management of the Nigeria based airline knew that it has a big task at hand: to fight a airfare price war with the foreign airlines which are well prepared for it.
At present the Europe and UK, flight routes are currently dominated by established foreign airlines like British Airways, Virgin Atlantic, Emirates, Qatar Airways, Ethiopian Airline, among others, which have brand new Aircrafts.
As a prelude to meeting the expectation of the travelers on the Europe and UK, routes and compete with, the foreign airlines to win the heart of foreign travelers, the Management of Air Peace, according to an insider were said to have placed significant aircraft orders, including 33 firm orders and 17 purchase rights , totaling 50 new planes. According to the source, the orders include, Boeing 73 MAX 8 and MAX 10 as well as Embraer E195-e2 and E-175 models.
From the onset, Allen Onyeama, the Chairman, Air Peace, may have sent a message to the other foreign airline operators operating the Lagos-London route, had g to be prepared for price war as its entry into the route will crash airfares, which had remained a burden to Nigerian travelers over the years.
Air peace, which is one newest Foreign airlines to enter the Lagos –London route knew that it had met other airlines already on ground before plying the route, it has to adopt a new marketing strategy of popularizing its operations by slashing its fares to win the heart of the Lagos- London return route bound passengers.
Air Peace Authorities may have reciprocated the lopsided Bilateral Air Service Agreement , BASA, between the Nigerian Government and the UK, when it started the direct flight operations from Lagos, to Gartwick Airport in London.
I t was therefore not very surprising that when it commenced operations on March 30, 2024, on the profitable Lagos-London route , it slashed its flight ticket , which was as high as N3.5 million for the economy class to N1.2 million , which the foreign airlines did not find funny.
The Foreign air line operators which appears to have had the backing of their home governments fears that with the action taken by t Air Peace, they would lose most of their long standing Customers from Nigeria and other parts of the West African sub-region to Air Peace.
The fallout was a gang-up by the foreign airline operators which have the resources to fight the price war with Air Peace which had just entered the Lagos-London route to underprice to remain competitive before being pushed out of the airline business by Air Peace.
The step taken by Air Peace Authorities to slash its round trip return ticket on the Lagos –London may have prompted the aggrieved foreign airlines to gang up against Air Peace to cut their airfares to as low as N1.4 million for a round- trip economy ticket for much of penultimate week .
Some of the foreign airlines were said to have further slashed their airfares to an average of N874,32.00 to retain their Nigerian based customers. Mention was made of Egypt Air , which was said to have further dropped its Lagos-London economy ticket price to the North American country of the United States, US, 470 dollar, or N585,620.00, going by the current exchange rate of N1,240 to one US dollar, Virgin Atlantic, $927.99 or N1.1 million, and Royal Air Moroco, $456.99 or N569,422.00 while British Airways goes for $787.99 or N981,848.00 for a round- trip to London.
Other foreign airlines like air Randa, pegged its fare to London at $545.35 or N679,070.00, Ethiopian Air, which had been contracted by the then Muhammadu Buhari’s Administration to manage and operate the still-unborn Nigerian Air, slashed it fare on the Lagos-London round-trip London trip to $543.84 , which is an equivalent of N67.824.00 Turkish Airline, $647.84 or N807,408, and Air France, $915.99 , equivalent of N1.1 million. KLM, on its part was said to have pegged its airfare on a round –trip Lagos route to $927.84 or N1.1 million.
The Air Peace Authorities may have known that the foreign airlines , championed by British Airways, Air France ,and KLM, Luthansa and Ethiopian airline are prepared to sabotage Nigeria, that they may have prepared for the war to reduce the pressure on the naira at both the Autonomous Foreign Exchange and Parallel, popular, Black market exchange rate.
Until, Air Peace, took the bold initiative to start the airfare war with the foreign airlines, to reduce the pressure on the country’s local currency, a one –way economy class ticket from Lagos to London cost about N3 million and N9 million for economy and business class respectively . It was said to have later been pegged at N2 million for economy class and N7 million for the business class.
Even Virgin Atlantic , which had a business relationship with the Nigerian Government during the Buhari’s Administration which had charged N2 million for the economy class and N5 million for economy premioum and N12 million for the business class now cost N1.5 million for Economy, N3 million for Premium and N6 million for business class, which was a rip-off on Nigerian travelers.
Data from the US Bureau of Labour Statistics published in February 2024, had predicted that airfares to some international destinations will significantly drop in 2024. Also the American Express Global Business ravel Air Monitor 2024 had reported that prices on some of the international routes may drop by 12% and which may lead to increased flights in the international routes.
One of such routes that had been pinpointed that will witness increased competition for customers was the Lagos-London route. It was therefore not surprising when the foreign airlines operating in Nigeria, the most populous country in the African Continent decided to slash their air tickets on the Lagos-London route.
But the Association of Foreign Airlines and Representatives in Nigerian, AFARN would not agree that the foreign airlines operating in Nigeria had reduced their air tickets on the economy and business classes from Lagos to London in the recent weeks because of the entry of Air Peace entry into the Lagos-London. It had attributed ‘’to the drop in in the naira exchange rate to other world major currencies at both the AFEM and the Parallel foreign exchange markets and the repatriation of trapped funds by the Nigerian government to the foreign airlines’’.
.Kingsley Nwokoma, President , AFARN, had said that even before the Air Peace took the decision to peg its airfare on the Lagos-London route when it commence operation late March, 2024, the foreign airlines have been talking to the International Air Transport Association, IATA, and the Nigerian Government on releasing low inventories .
Hear him: a substantial amount of the foreign airlines trapped funds in the Central Bank of Nigeria, CBN, during Buhari’s Administration has been paid to the airlines by President Bola Ahmed Tinubu’s government. He noted that was the foreign airlines had released new fares and not necessarily because of Air Peace into the Lagos-London route and decision to charge low price on the route. He had justified the reason why airfares on the Lagos-London route went up in in the first instance was because ‘’low inventories were shut down by the previous Administration of Buhari.
Onyeama, Air Peace Chairman would not take it from AFARN, President, noting that the foreign airline operators had slashed their fares on the Lagos-London route ostensibly ‘’to drive the Nigerian carrier out of the market’’. The Air Peace Chairman who is not worried by the gang up of the Foreign airlines against the Nigerian Carrier had said that the same strategy being employed right now by some of the foreign airline operators ‘’to drop their old airfares so that international travelers will now leave Air Peace and patronize those Foreign airlines will fail them’’’.
‘’Describing it as devilish’’ , he had said that the Foreign airlines are underpricing below the cost of operation, let alone buy Aviation Kerosene run the aircraft but much more concerned in filling up the entire aircraft to carry people on the wings to show that the airlines are still making waves but are really bleeding internally.
With the reduced pressure on the demand for US dollar, by International travelers, due to the price war by the foreign airlines to beat air Peace to it, may have informed why Vice President Kashim Shettima, who incidentally was a former governor of Borno state had said that ‘the naira will continue to stabilize in the coming weeks and months’’.
Adebayo Adelabu, the minister of Power , and an apostle of the recent increase of electricity tariff by Musiliu Oseni led National Electricity Regulatory Commission, NEC, for consumers on category A Band, had said that the Foreign airlines may not be the only Organizations to take advantage of the appreciation of the naira at the Foreign Exchange markets to cut drastically their airfares but that’’ the current high electricity tariff paid by Nigerians should moderate positively to come down below the N225.00 currently charged per kilowatt per hour.’’
