The strategic entry of Nigeria-based airline, Air Peace into the Lagos to London route with reduced fares has provoked a price war with foreign airlines. The foreign airlines have reduced their airfares drastically to compete against and possibly force out the indigenous Nigerian airlines from the route.
Air Peace started direct flight service from Lagos to London on March 30, of which the Minister of Aviation and Aerospace Development, Festus Keyamo, thanked Gatwick Airport, London management for welcoming the Nigerian airline recently.
The Nigerian airline set its price for a round-trip economy ticket at N1.2m on a route that foreign airlines were charging as much as N3m to fly passengers on.
This move had seen foreign airlines cut their airfares to an average of ₦1.4m for a round-trip economy ticket last week, action experts and stakeholders had anticipated.
According to checks last Wednesday, some foreign airlines have slashed their price to an average of ₦841,732.
The checks show that Egypt Air crashed 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
The development follows price cuts by the airlines from as much as N3.5m between January and February 2024, to an average price of N1.4m last week.
Last Wednesday’s ticket prices were significantly lower than in the second half of last year and early this year. As of July last year, a one-way economy ticket from Lagos to London cost ₦2.7m at a conversion rate of ₦907 per dollar at the time.
In the first week of April this year, a one-way ticket cost between ₦1.03m and ₦1.3m despite the exchange rates being higher at ₦1,250 per dollar.
The ‘price war’ that followed the commencement of Air Peace operations had been anticipated by some experts who believed that the foreign airlines would not just sit back and allow Air Peace to dominate flights on the route.
A travel and tourism expert and former President of the National Association of Nigeria Travel Agencies (NANTA), Bankole Bernard, who was a guest on Channels Television’s The Morning Brief on Tuesday, last week, had accused foreign airlines operating in the four major airports in Nigeria of making more humongous profit, unchallenged.
“How come all of a sudden airfares have gone down? What could be responsible for that? Number one: there is a new entrant to a major route (Lagos-London),” Bernard said.
“There are two major destinations that Nigerians ply. Number one is Dubai and Dubai has been out of it for a while now (due to visa restrictions). So, we (Nigerians) have resorted to the London route. The UK route is where a lot (of foreign carriers) use to earmark their airfares.
“Now that Air Peace has come into that space with a direct flight that will not cause any layover in any other country, the price has dropped. Why? What happened? Is there a magic around that? We should be able to question what made the prices drop.
“The prices will drop as long as we have another form of supply different from the conventional ones. The supply that we now have, which is Air Peace, a direct flight will put pressure on every other route. So, all the other airlines are forced to adjust quickly or they will be out of the market in no time.”
The Chairman of Air Peace, Allen Onyema, however, believes the foreign airlines are conspiring to force him out of international operations by crashing airfares on the route.