Business
Air Peace entry ignites vicious price war on Lagos-London route
…. as rattled foreign airlines crash fares to retain market share
A vicious battle for the control of the highly lucrative Lagos-London route is currently raging among major international airlines, Business Hallmark findings have revealed.
In their quest to outdo each other in the push for passengers, international airlines, BH gathered at the weekend, have significantly crashed their hitherto high fares in what observers described as ‘a price war’.
The price war, our correspondent gathered, is not unconnected to the recent foray of Air Peace into the lucrative Lagos-London route, which before now was exclusively controlled by foreign airlines.
It would be recalled that Nigerian carrier, Air Peace, had on March 30, 2024, commenced commercial flights to London Gatwick Airport from the Murtala Mohammed International Airport, Lagos.
The inaugural flight, which took off from the Terminal 2 of the international wing of the MMIA at exactly 11.30pm with 270 passengers on board, landed at the Gatwick Airport, London at exactly 6.15am.
The euphoria of the epoch event is still reverberating across the nation owing to the fact that the last flight to London by an indigenous carrier happened more than seven years ago.
Several indigenous airlines had dared to operate from Nigeria to London, but all of them could not sustain the drive and subsequently pulled out from the route.
For instance, the defunct Virgin Nigeria, with an Airbus A340-300 aircraft, started flights on the lucrative route on June 28, 2005, but terminated operations in 2009. Arik Air took up the gauntlet on December 15, 2008, with the launch of a scheduled flight to London-Heathrow Airport.
However, Arik Air soon faced financial difficulties and discontinued its London services despite initially raising the hopes of millions of Nigerians longing for a national carrier.
Another indigenous airline, Med-View, like its predecessors, also joined the fray in November 2015 but could not sustain the tempo. It operated for only few months before it finally bowed out in 2017.
Air Peace inaugural flight from Lagos to London on March 30, thus marked the resumption of flights by an indigenous carrier to one of the most lucrative routes to and from Nigeria.
The airline’s low introductory fares on the route, compared to that of other airlines, as well as localised services, like Nigerian meals and snacks served to passengers on its flight, had further endeared the airline to many Nigerian and African passengers alike.
Findings show that while foreign airlines were charging an average of N3.6 million and N7.3million for economy and business class tickets from Lagos to London just before Air Peace entry into the route, the indigenous carrier pegged its economy and business class tickets on the same route at N1.2 million (about 66 percent discount) and N4 million, while Nigerians studying in the UK can access a special 15 percent rebate on the economy class fares.
Expectedly, the airline recorded a surge in passenger traffic, with all the categories of its ticket classes quickly mopped up months before the takeoff dates.
On April 3, a visibly elated Allen Onyema, owner of Air Peace, disclosed that his airline had sold out tickets for its Lagos-London flights until September.
“When you say what has it been like, right from the day we published our fares, even that inaugural flight got sold out within days.
“It got sold out in days and even up to September. So, the traffic is there; however, the last 48 hours has not been easy”, Onyema stated.
But Air Peace seemed to have been caught in a bedlam of conspiracy by major international airlines like British Airways, and Virgin Atlantic, which before now had the exclusive advantage of operating direct flights from Lagos to London.
The foreign airlines, which now have to contend with Air Peace for passengers, our correspondent learnt, are seriously bothered by the relative ease at which the airline had been able to settle down to business, as well as its continued encroachment on their territories.
According to available data, Air Peace has been able to snatch about 25 percent of the London-Lagos market from the airline majors. The troubled airlines, however, are not willing to easily roll over, but are fighting tooth and nail to take over lost market.
One of the tactics introduced to stall Air Peace from advancing on their terrain is the introduction of even much lower tariffs than those offered by Air Peace.
BH checks on the online booking platforms of all foreign airlines that operate the Lagos-London route at the weekend revealed that they have all effected changes to their ticket prices.
Passengers from the capital city of Abuja traveling to London Heathrow Airport by British Airways will pay $929 (N1,161,250 at an exchange rate of N1,250) for Economy class ticket if they booked from April 16, 2024, against the fee of N3.12million charged by the airline in March.
Likewise, Business class passengers are charged $2,631 (N3,288,750) for a 2-way return ticket departing on April 8, compared to the old fare of N7.3million.
Like British Airways, another British carrier, Virgin Atlantic, has also crashed its airfares to Nigerian customers. A check on the website of the airline showed that there are no available seats until April 14. Meanwhile a trip to London from Lagos starting from April 16 to May 29 goes for $967 (N1,208,750) on average.
Other airlines and the prices of their available Lagos to London economy tickets from April 16th to May 31st, 2024, are Lufthansa $928 (N1,160,000); Air France $656 (N820,000) and KLM $704 (N880,000).
It was observed that virtually all the airlines have vacant seats up to a week to takeoff, unlike in the case of Air Peace, which seats are fully booked until the end of September 2024.
Meanwhile, foreign airlines were charging over N3 million (economy) for direct flights to London, while connecting flights cost between N1.45 million and N2 million, depending on the airline before Air Peace entry into the foray.
Aviation stakeholders, who spoke on the development alleged that foreign airlines, especially from Europe, are bent on frustrating Air Peace out of the route.
“A leopard can not change its colours, it has never happened. We saw it (price war) coming and warned the Air Peace chairman to be prepared.
“They (foreign airlines) chased Med-View, Arik and Virgin Nigeria out the route just because they see it as their birthright.
“Thankfully, we have a sitting president that seems to be nationalistic in nature. President Tinubu delivered a strong message by putting two of his ministers (Minister of Aviation and Minister of Trade and Industry) on the inaugural flight to London.
“Their presence on the flight suggests the government’s involvement in the airline. The battle is still not over as we’ll see more in the coming weeks and months”, declared Captain Gbenga Are.
BH checks revealed that Gatwick Airport is located 51.3km outside London, where Air Peace currently flies. Transportation from the city to Central London costs between £13 to £20 using the train.
When BH reached out to the Chairman of Air Peace, Allen Onyema, on the choice of Gatwick instead of Heathrow, he explained that his team decided on Gatwick Airport, because the British aviation authorities denied the airline access to Heathrow
“In accordance with the Bilateral Air Service Agreement (BASA) signed between UK and Nigeria, Air Peace was supposed to be offered UK’s primary airport, which is Heathrow, just as Nigeria offered its primary airports in Lagos and Abuja to British Airways and Virgin Atlantic Airways.
“The BASA we signed with the UK is this: you give me your primary airport; we give you our primary airport. British Airways, and Virgin Atlantic Airways come to our country using our primary airports, Lagos and Abuja.
“But when we applied, they told us Heathrow was not available to us and they were suggesting London Stansted Airport or Luton. They also suggested Gatwick, I refused. I wanted to go to Heathrow, which is their primary airport.
“But after some time we said okay, as Nigerians are groaning under the weight of high fares; we decided even if it is Scotland; we would go.
“So, we decided to take Gatwick. Gatwick was not really our choice but in the long run, we decided to see some good in choosing Gatwick.
“Gatwick has even turned out to be better for us. Many of our people live down South East part of London and there is heavy traffic into Central London from Heathrow. But from the South Terminal they allotted to us, you have access to tube, you have access to national rail and you have access to road transport to other parts of UK”, Onyema explained.
Some industry experts, who spoke to BH on the matter warned that if the trend continues, things could turn bad for Air Peace as its backers lack the purse and influence to confront the obvious plots against the airline.
“Air Peace may soon go the way of others before it unless the Federal Government comes to its aid. As things stand, tickets churned out by these foreign airlines are becoming cheaper than those of Air Peace.
“Also, the decision of the British government not to allow Air Peace operate from Heathrow, which is in the heart of London won’t help the airline.
“Why would they push Air Peace to Gatwick, which is far away from the city? It’s like first dropping passengers going to Lagos or Abuja at the Ibadan or Minna Airports for them to now find their way back to their intended cities.
“Apart from it being totally inconvenient, it is also very costly as it will require up to £100, if not more in transportation costs alone.
“It may get to a stage where some travelers will abandon nationalism and start looking for bargains and convenience.
“The unfortunate part of it all is that it is not as if these foreign airlines love Nigerians. No, not at all. The government had begged, blackmailed, and even threatened them to lower their fares or face stiff sanctions, but they didn’t budge.
“They are only interested in muscling out Air Peace so that they can go back to business as usual when they are in total control of the market.
“Their decision to slash their ticket prices is suspicious. Why now when Air Peace has joined the route?”, Kumbi Onadeko, CEO of Turner Travels, Ikeja, Lagos asked rhetorically.
