Aiir Peace Slashes Lagos To London Flight Fare By 66%

 

Nigeria's foremost airline, Air Peace has strategically positioned itself in the aviation market by unveiling an economy class ticket priced at N1.2 million, effectively implementing a substantial 66% reduction in fares for a specific route. 

This move comes as a competitive challenge to foreign carriers, notably British Airways, which historically held an exclusive advantage in operating direct flights from Lagos to London.

Foreign airlines, according to BusinessDay's investigations, typically charge an average of N3.5 million for economy class tickets on the Lagos to London route. 

Air Peace's introduction of a N1.2 million economy class ticket is not only a significant market disruption but also a substantial reduction, approximately by two-thirds, in ticket prices.

British Airways, facing competition from Air Peace, no longer enjoys an exclusive monopoly on the direct flight route, as Air Peace plans to operate flights not only to London but specifically to Gatwick. This move signals a shift in the dynamics of the competitive landscape.

The airline officially launched its London service schedules, slated to commence on March 30, 2024. In terms of pricing, Air Peace offers a return economy class ticket at N1,200,000 and a return business class ticket at N4,000,000. Notably, Nigerian students in the UK are eligible for a special 15% rebate on the already reduced economy fares.

Comparatively, British Airways charges $2,698 for an economy class return ticket from Lagos to London, equivalent to about N4.7 million, and a substantial $8,598 for a business class ticket, amounting to roughly N15.2 million.

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Virgin Atlantic and Qatar Airways also operate on this route, with varying ticket prices across different classes. Air Peace's competitive pricing, as noted by Ndukwe Ginika Ogechi, CEO of Geena Travels And Tours Ltd, is perceived as favorable compared to other airlines. This sets the stage for intensified competition within the market.

“My clients are already excited, although they expected the fares to be cheaper since Air Peace is a Nigerian carrier and the foreign exchange pressure is not so much on them. However, IATA’s exchange rate on the platform as at Wednesday is N1,778 to a dollar, which is really high. This exchange rate will continue to be a key consideration when airlines fix prices,” Ogechi said.

The surge in airfares over the past two years, soaring by over 400%, can be attributed to the accumulation of trapped funds of foreign airlines in Nigeria, primarily influenced by fluctuations in the foreign exchange rate. The Central Bank of Nigeria (CBN) has responded by instructing banks to remove the cap on the investors and exporters' (I&E) window of the forex market, promoting a free float of the naira exchange rate.

Notably, airlines, faced with challenges of trapped funds, adopted strategies such as blocking low ticket inventories, selling high inventories exclusively in naira, and restricting purchases of low-ticket inventories on their websites to dollar transactions. This was a concerted effort to mitigate the impact of trapped funds within the Nigerian market.

Bankole Bernard, Chairman of the Airlines and Passengers' Joint Committee (APJC) of the International Air Transport Association (IATA), views Air Peace's London flight as a positive development, emphasizing the creation of a balanced trade scenario for Nigeria with its own carrier in the mix. This move signifies a shift in the dynamics of the aviation industry, fostering healthy competition and potentially benefiting passengers through improved affordability and options.

“There will be a bit of balance. Air Peace has been given a daily slot to Gatwick which amounts to seven frequencies, compared to 21 frequencies that the legacy airlines have; 14 in Lagos and seven in Abuja. To an extend, we have something that will balance it up.

“Air Peace is not going to be faced with challenges of foreign exchange because the fares will be in naira. It is a welcome idea for travel agents and Nigeria as a whole. We appeal to Air Peace to try it’s best to sustain the London route. We are willing to give them all the support to ensure this is successful. With Air Peace, travel agents envisage a 50 percent fare reduction,” Bernard said.