The recent entry of Nigeria’s major international carrier, Air Peace onto the lucrative air corridor between London and the Nigerian city of Lagos has sparked a price war among incumbent airlines serving the route, according to the newcomer airline’s CEO.
Air Peace commenced operations between London-Gatwick Airport (LGW) and Lagos (LOS) on March 30, 2024.
According to a report published in Nigeria’s This Day newspaper, Air Peace’s flights started with the airline offering a round-trip economy ticket at $962 on a route that foreign airlines traditionally charge around $2,407 for a return ticket. However, offering a low entry fare seems to have upset some of the other airlines offering fares on the same route, with many now discounting ticket prices to counteract the potential threat posed on the route by Air Peace.
According to This Day, at the start of the week commencing April 8, 2024, the average fare on the London to Lagos route had already dropped to an average of just $675. Egyptair has dropped its Lagos to London economy return ticket price to $470, British Airways is selling at $788, Virgin Atlantic at $928, and Royal Air Maroc at $457. Air Peace London to Lagos is currently selling at $655.
Additionally, RwandAir has pegged its airfare to London at $545, Ethiopian Airlines at $543.84, Turkish Airlines at $647, Air France is charging $915, and KLM has pegged its price to $927.
Comparing the current airfares on offer to those charged before Air Peace entered the market, a one-way ticket from Lagos to London on British Airways previously cost $2,500 for an economy ticket and $8,827 for business class – prices which have subsequently dropped to $1,364 and $4,814, respectively.
The drop in fares is being seen as part of a wider predatory pricing strategy being pursued by other carriers to force Air Peace to give up the route, according to the Chairman and CEO of Air Peace, Dr Allen Onyema.
“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 under-pricing us [at a price] that is below the cost of operation.”
“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 it’s going to happen if they’re able to take Air Peace out because what is happening now is scary.”
Reaction to predatory pricing accusations
Reacting to the comments made by Onyema, former Director General of the Nigeria Civil Aviation Authority (NCAA), Benedict Adeyileka, said that a price war was indeed on among foreign airlines on the Lagos to London route, adding that the plan was to drive out Air Peace from the market and then to increase airfares by 300%.
Adeyileka added that before Air Peace entered the market, foreign airlines were “ripping off” Nigerians with “outrageous fares”, making Nigeria their most profitable route because “they charge almost double and very high fares what they charge for London to Johannesburg route that is three hours longer than Lagos to London.”
“They have been enjoying a monopoly on the Nigerian route, but now a Nigerian carrier has joined the market they want to drive it out with a price war,” he said. “If they succeed within 48 hours the airlines will more than double the prices.”