In the fast-paced and ferociously competitive airline sector, price wars have become like Siamese twins that can not be separated by the actors, as a surviving strategy.
While price wars are a common occurrence in the airline sector, they represent intense competition that sees airlines cut prices in an attempt to snatch passengers from their competitors. The subsequent implication may automatically trigger reduced margins and profitability. To thrive amid these price wars, airlines need strategy and competitive intelligence, specifically competitive flight price data to survive.
This is what is presently playing out in Nigeria’s air transport sector with focus on international flights since Air Peace, a Nigerian carrier, commenced flights to London Gatwick on March 30, 2024.
Prior to the entrance of Air Peace to the Lagos/London route, foreign carriers had, for many years, not only monopolized the lucrative route, but exploited the Nigerian travelers who were made to pay the costliest fares in the region while neighboring countries like Ghana, Togo and Benin Republic enjoyed very low fares.
The exorbitant fares by the foreign carriers reached its peak following the over $800 million of their proceeds trapped in Nigeria with the mega carriers withdrawing their lowest inventory fares, leaving the highest inventory fares for Nigerians to grapple with.
The withdrawal of low inventory fares by the foreign carriers saw airlines like Virgin Atlantic increase fares on the economy class to N2.353,200 for just a seat while the business class skyrocketed to N5,345,700 on the Lagos-London route.
For Turkish airlines, the economy class ticket for the Lagos-Istanbul route rose to N874,661 while the business class ticket jumped to N1,980,876.
This was the same situation Nigerian travellers experienced with other foreign carriers like British Airways, Delta Air Lines, Lufthansa, KLM/Air France, Air Maroc and Ethiopian Airlines.
Before the foreign carriers ganged up to increase their fares, economy class tickets on the Nigeria-UK route was between N400,000 and N650,000, depending on the booking period while business class was between N800,000 and N1.2 million.
The financial pressure the exorbitant fares inflicted on the Nigerian travelers became so unbearable that those who could not afford it were forced to suspend international trips while some like students shifted their patronage to the neighboring countries where low inventory fares were available.
The rip off continued even after the federal government had paid the substantial part of the trapped funds with the outstanding funds now put around $29 million.
Relief however came with the commencement of Air Peace flights to London.
Immediately Air Peace announced its fares which have been found cheaper and more affordable for Nigerians, the foreign carriers, out of fears of losing their Nigerian, passengers to Air Peace have engaged in price wars for survival.
According to investigations, majority of the foreign carriers operating on the Nigeria/London route have conspired to drastically slash fares to the point of charging fares lower than Air Peace fares.
Apart from introducing new incentives and more friendly marketing strategies, the foreign airlines are neck deep in dangerous battles for market share that is capable of sending weaker airlines out of business and equally wreak havoc on profit margins or even challenge the very survival of Air Peace.
A price list sighted by Saturday Tribune showed Air France luring passengers to book between May 15 and June for economy class seat on the Lagos/London route with N907,782 fares as against the over N2 million for the economy it charged before now.
British Airways has also slashed its fares on the Abuja/London Heathrow to N1,394,536 as against the over N3 million it was formerly charging. Now, an economy class ticket on Virgin Atlantic from Lagos to London has been brought down to N980, 654,000 as against the N2.353,200 it used to charge.
The ongoing price wars and other gang ups by the foreign carriers which has raised concerns amongst key players have been attributed to the desperation of the mega carriers to push out Air Peace out of the Lagos/London route.
The price war strategy adopted by the foreign airlines has been described as one of the unjust engagement of the use of international Aero politics to frustrate any African carrier they see as competitive like Air Peace.
Many of the foreign carriers are said to be uncomfortable with the presence of Air Peace in view of its capacity in the areas of modern day aircraft in its fleet that can compete favourably with those of the foreign carriers.
The global record of the Nigerian carrier as a carrier that had in the past engaged in flight operations between Nigeria and other countries like China, UAE, Israel Brazil and South Africa during the pandemic seamlessly may have caused sleepless nights for the foreign carriers.
Many key players while reacting to the foreign airlines price wars described the market as extremely agile and impatient. They advised Air Peace to urgently change its game plan by making “the world taste what it means to be a truly Nigerian brand. You could see the presence of intentionality in their campaigns. It shows a clear understanding of the market. They are unleashing on Air Peace products of insights derived from the algorithm in their passengers platforms. They know where these customers are, they have their details, they may even be engaging passengers directly.”
The sudden reduction in the fares the key players said will be for the benefit of the Nigerian travelers who are the brides. They, however, expressed surprise at how the foreign airlines that refused to reduce their fares ab initio suddenly slashed the fares just to get at Air Peace.
About The Author
