The entry of Nigeria’s major carrier, Air Peace has sparked price war among foreign airlines which have severally reduced their airfares to compete effectively with the Nigerian airline or drive it out of the market.
Air Peace started direct flights from Lagos to London on March 30, pegging its price for a round-trip economy ticket at N1.2m on a route that foreign airlines had charged as much as N3 million.
This prompted foreign airlines to cut their airfares to an average of ₦1.4m for a round-trip economy ticket last week, but checks yesterday showed that some foreign airlines have further slashed their price to an average of ₦841,732.
Against the background of the Central Bank of Nigeria’s exchange rate of N1246/$1, checks on prices by most of the flights showed that Egyptair has dropped its Lagos-London economy ticket price further to ($470) ₦585,620. Air Peace London to Lagos now goes for ($655) ₦816, 130, British Airways goes for ($787.99) ₦981, 848, Virgin Atlantic ($927.99) ₦1.1m, and Royal Air Moroc ($456.99) ₦569,422.
Also, RwandAir has pegged airfare to ($545.35) ₦679,070, Ethiopian Air ($543.84) ₦677, 824, Turkish Airlines ($647.84) ₦807, 408, Air France London ($915.99) ₦1.1m, while KLM pegged its price to ($927.84) ₦1.1m
Juxtapose these fares to the cost of flight tickets before last week and the entrant of Air Peace to the London market.
The fares were as follows: a one way economy class ticket from Lagos to London on British Airways which cost N3 million for Economy and N11 million for Business Class recently dropped to N1.7million for economy and N6.8million for Business Class.
On Lufthansa, a one way economy class ticket from Lagos to London which also cost about N3 million and N9 million for Business class was later put at N2 million for economy class and N7 million for Business Class.
On Virgin Atlantic, the same destination which cost about N2 million for Economy, N5 million for Economy Premium and N12 million for Business Class cost N1.5 million for Economy, N3 million for Premuim and N6 million for Business Class.
These indicates that since Air Peace joined the Lagos-London route, foreign airlines have reviewed their fares downwards severally and as the Chairman and CEO of Air Peace, Dr Allen Onyema said in interview with Channels TV yesterday, the London-Lagos route is no more lucrative because the airlines are slashing their prices to drive the Nigerian carrier out of the market.
“The same strategy is being employed right now by some of the foreign airlines to drop the price so that people will now leave Air Peace and go to those foreign airlines. Of course, it is a very devilish conspiracy. All of a sudden, other airlines are underpricing; that is below the cost of operation
One other airline was advertising $100, one $350. If you fill up the entire aircraft and carry people on the wings, it is not even enough to buy your fuel, so why are they doing that? Their governments are supporting them because Nigeria has been a cash cow for everybody. Their governments are supporting them to do this and take Air Peace out.
“The idea is to take Air Peace out and the moment they succeed in taking air peace out, Nigerians will pay 20 times over and its going to happen if, God forbid, they’re able to take Air Peace out because what is happening now is scary and of course, even at Gatwick where you are, are you given 100% corporation? Let me tell you this on the first day of the inaugural flight out of london, 24 hours to the time, they moved us to another checking area other than the place assigned to us. The place they gave us the carousel was not working so when you check-in people, you need to manually carry the load to some 50 meters away to go and drop it somewhere else just to delay you. No other airline faces that.
If they take out Air Peace prematurely, this country will pay dearly for it 10 times over quote me, billions will be lost and there will be another heavy strain on the naira,” Onyema said.
Reacting to this development, former Director General of the Nigeria Civil Aviation Authority (NCAA), Benedict Adeyileka, told THISDAY that price war is on among foreign airlines on the Lagos-London route that the plan is to drive out Air Peace from the market and then they increase airfares by 300 per cent.
He said before Air Peace entered into the market, foreign airlines were ripping off Nigerians with outrageous fares, making Nigeria their most profitable route because they charge very high fares that are almost double what they charge for London-Johannesburg route that is three hours longer than Lagos-London, which is about six hours.
Adeyileka regretted that the Nigerian government allowed foreign airline to operate cabotage service, whereby they carry passengers from one Nigerian airport to another Nigerian airport, against what is in the Bilateral Air Service Agreement (BASA) and what those countries that own the airlines will never allow Nigerian carriers to do in their airports.
“Foreign airlines are crashing their prices because they want to bring Air Peace down. Nigeria has become very lucrative to these airlines because government allowed some of them, including Ethiopian, Turkish, Qatar, Lufthansa to practice cabotage, taking passengers from one of our airports to another of our airports, which is unacceptable. I can say it anywhere, they cannot do this without the connivance of Nigerians.
“They have been enjoying monopoly on the Nigerian route; but now a Nigerian carrier joined the market they want to drive it out with price war. If they succeed within 48 hours the airlines will more than double the prices. They will increase the fares by 300 per cent. Let then continue to bring down the prices, it is good for Nigeria,” Adeyileka said.
According to him, what will save Nigerian carriers is patriotism as well as government support, noting that when he worked in UK, UK owned airlines were not buying aviation fuel at the same cost as foreign airlines and they were not paying the same airport charges as foreign airlines and urged the Nigerian government to find ways to support Nigerian carriers.
He said that what the current development has confirmed is that if Nigerian airlines are not encouraged to operate international destinations, Nigerians will not be paying more than their counterparts in other parts of West and Central Africa for the same hours of flight.
“If we want the naira to continue to gain value and also to reduce the demand on the dollar, government should encourage local carriers where passengers can buy their ticket in naira and the airline will not repatriate its earnings through forex out of the country.”
