Much ado about fares for international flights
Nigerians are adjudged amongst the most widely travelled nationals across the surface of the earth. The lure to get on board the aircraft to the next destination is usually propelled by business, commerce; trading, conferences, leisure and most recently search for a greener pasture, commonly referred to as “JAPA”. But, a spike in airfares majorly by foreign carriers in the last few months has put spanners in the works of these shuttles, until an indigenous carrier, Air Peace commenced direct flights into Gatwick in the United Kingdom March 30, 2024. In a dramatic move, foreign carriers are now offering lower fares on major routes, forcing Nigerians to weigh the options, writes Kelvin Osa-okunbor
These are interesting times in the air transport space, as the lure to get on board the next available aircraft to a favourite destination could not be any other time than now. Reason: air fares on major international routes, which hit the roof tops a few months ago continue to crash to the admiration of Nigerians.
Many Nigerians who have perished the thoughts of travelling on account of discriminatory fares are beginning to review their decision.
But, high fares on international routes from Nigeria is not new in aviation, due largely to the absence of indigenous carriers designated on the Lagos /London route.
Before the advent of Air Peace on the scene with its maiden flight since March 30, 2024, many indigenous carriers have operated the route with a litany of challenges.
Virgin Nigeria Airways, Arik Air, Medview Airlines have operated the Lagos/London routes with some degree of success before they crashed out.
Experts say attributing the entrance of Air Peace on the route as the major cause for a significant drop in air fares may not be the entire narrative.
They said following the complaints of Nigerians, the Nigerian Civil Aviation Authority (NCAA), had cautioned foreign carriers to open low fare inventory for Nigeria, else they will be penalised.
To drive this, the NCAA had set up a 10- man committee to achieve low fare inventory by foreign carriers for the country.
Part of the objective of the 10- man committee, NCAA’s Director General, Captain Chris Najomo said is to make air travel more affordable by probing the rationale for skyrocketing air fares by foreign carriers. The committee, chaired by Director of Special Duties, Horatius Egua was mandated to ensure foreign airlines comply with government directives to unblock low-inventory tickets that have been inaccessible for over 18 months as well as recommend appropriate pricing of tickets in Nigeria compared to similar markets in the West African sub-region.
Egua said: “This is very discriminatory in nature. We cannot continue to pay higher fares compared to other countries in the sub-region that have similar distances, using the same operating aircraft. We have the market and in some cases we have more liberal taxes? This is unacceptable and we totally reject this.
“For instance, a distance of six hours from Ghana to London may sometimes cost about $800 while a similar distance with similar operating aircraft cost over $2000 in Nigeria. This is discriminatory and an unfair practice and we reject this in totality.
“In the last several months, Nigerians have been made to pay higher fares on international flights unjustly as all the foreign airlines increased their flight tickets astronomically citing the high exchange rate as well as other sundry issues and also deliberately blocked low inventory tickets making travel unbearable for Nigerians.”
A few days after meeting with foreign carriers, several international airlines, including Lufthansa German Airlines, KLM, Egypt Air, Ethiopian Airlines, British Airways, Royal Air Maroc, RwandAir, and Turkish Airlines, have reportedly released all categories of low-inventory tickets.
Speaking on the development, President of Association of Foreign Airlines and Representatives in Nigeria (AFARN), Dr. Kingsley Nwokoma said the entrance of Air Peace could not be attributed as the major reason for foreign carriers to reduce air fares charged from Nigeria.
Nwokoma said fares reduction on the London route and other destinations is not because of competition by Air Peace but a drop in the foreign exchange rate and the repatriation of trapped funds.
He said: “Competition is good but before Air Peace came onboard, foreign airlines have been speaking to the International Air Transport Association (IATA) and the government on releasing low inventories. This discussion has been going on for a while now.
“A substantial amount of trapped funds have been paid to foreign airlines and that was why foreign airlines released lower fares. The reason why fares went up in the first place was because low inventories were shut down.
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“Now government has shown enough goodwill to make payments, so it is in the interest of airlines to also show some goodwill to Nigerians by making low inventories available. To the best of my knowledge, CBN has cleared the entire backlog, the only outstanding payments are the ones with the bank.”
He stressed that it was at the same time CBN cleared the trapped funds, that naira gained strength. This, according to him, made fares drop. “Fortunately all these happened the same time Air Peace commenced its Lagos-London flight,” he added.
Nwokoma said if the trapped funds were cleared during the last administration, passengers won’t have to pay high fares in the first place.
Also speaking, President, National Association of Nigerian Travel Agencies (NANTA), Mrs. Susan Akporiaye, explained that shortly before Air Peace started flights to London, the Nigeria Civil Aviation Authority (NCAA) had threatened to sanction foreign airlines that failed to release low ticket inventories.
Akporiaye also stated that the reason why tickets were expensive was because airlines were selling only the highest ticket inventories.
“When the exchange rate was as high as N1,850 to a dollar, ticket inventory available on the Lagos-London route was between N5 million to N6 million. The NCAA had to engage the airlines to reduce fares because these prices were out of reach for many Nigerians. Some airlines released low inventories 48 hours after the NCAA asked them to, while others pleaded that they be given one week and some two weeks to release low inventories.
“However, whatever the rate of exchange is, is what you see in naira. The rate of exchange determines the price of tickets. Now the rate of exchange has dropped, BA and Virgin Atlantic are charging as low as N1.1 million and N1.2million for a return ticket from Lagos to London. As the naira gains more strength, fares will continue to drop. Air Peace will also have to further reduce fares, if not, they will not be able to compete on the route,” Akporiaye explained.
But, the Chief Executive Officer of Air Peace, Allen Onyema, said the significant reduction in international airfares by foreign airlines operating the Nigeria-UK route is an attempt to prematurely remove Air Peace from the route.
Onyema stated this after launching the Lagos-London route.
The CEO of Air Peace pointed out that prior to his airline entering the Nigeria-UK route, foreign airlines charged exorbitant prices, with business class tickets costing as much as N17 million and economy class going to N5 million, attributing these high fares to the exchange rate.
However, just weeks after Air Peace started operating on the Lagos-London route, the same foreign airlines drastically reduced their fares in an attempt to oust Air Peace,
“The foreign airlines were taking between N15-N17 million for business class, N6 million for premium economy, and N5 million for economy.
“Then Air Peace came on, charging N4.5 million for business class, and economy class starting from N1.2 million.
“Now Air Peace did this, everybody has started crashing their prices from N18 million to N5 million.
Onyema further elaborated that foreign airlines are conspiring to cut their fares to levels below their break-even point, aiming to push his airline out of the Nigeria-UK route.
He warned that if these foreign airlines succeed, Nigerians would face considerably higher fares than the current rates.
“It is a very devilish conspiracy. All of a sudden, airlines are underpricing.
“The idea is to take Air Peace out. The moment they succeed in taking Air Peace out, Nigerians will pay 20 times over,” he stated.
While Onyema acknowledged the Federal Government’s support, especially from the Minister of Aviation and Aerospace Development, Festus Keyamo, in launching Air Peace’s Lagos-London route successfully, he called on the government to intervene.
He highlighted the need for action against foreign airlines that are slashing fares below their break-even points, aiming to force Air Peace out of the Nigeria-UK route prematurely.
Onyema suggested that the government could assist Air Peace by reducing its operational charges, thus providing the airline with a better opportunity to compete against foreign carriers backed by their governments.
Air Peace launched its Lagos-London route on March 30 to provide quality travel experience and make international trips affordable.
Since commencing its UK service, Air Peace has offered competitive rates, starting economy class fares at N1.2 million, significantly less than the N3-5 million usually charged by foreign carriers.
The airline priced its business class tickets at around N4.5 million, far below the N15-N18 million foreign airlines’ rates.
This pricing strategy garnered praise from Nigerians for its affordability, leading to a price reduction by foreign airlines on the Nigeria-UK route.
Recent developments in the industry have drawn attention to what experts call airfare war.
Prior to the entrance of Air Peace on the Lagos/London route, foreign carriers had, for many years, not only monopolised 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 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 travellers 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 neighbouring countries where low inventory fares were available.
A price list sighted last week indicates that Air France is luring passengers to book between May 15 and June for economy class seats 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.
Meanwhile, the Federal Government has promised to reciprocate any treatment meted on Air Peace on its recently launched Lagos-London route.
Minister of Aviation and Aerospace Development, Mr Festus Keyamo said if any country or airline introduces obstacles to frustrate Air Peace’s operations, the administration will not relent to apply relevant measures to protect its carrier.
“If they introduce subtle obstacles to frustrate Air Peace, then we will introduce ours too. We must reciprocate,” Keyamo said.
Chris Najomo, the acting Director-General Civil Aviation (NCAA), said for indigenous airlines to succeed on any international routes, it is necessary for the government to adopt the Fly Nigeria Act for public officials.
Also, he promised that the NCAA would support Air Peace and other indigenous airlines to succeed on international routes unlike in the past.
“It is expected. It has been there even when I used to fly for Arik Air when the airline was going to London. It was there (aeropolitics). Now, because there is a Nigerian carrier on that route, we have given them 21 frequencies. This is just the beginning. It will be there and they will bring all sorts of ways to be able to cripple them, but I want to use this opportunity to tell the Federal Government to make a policy that Nigerians, government officials must fly Air Peace. That is my say here. I want the Federal Government to tell Nigerians “Fly Air Peace to London.
“We are seeing that already. Other airlines have opened up their lower fare tickets to Nigerians now because Air Peace has come in. This is a very bullish approach to breaking the monopoly on this route. The UK has 21 slots into our country every week. British Airways alone has 14 weekly slots. The other slot is for Virgin Atlantic Airways.”
Speaking on the development, former President NANTA, and Travel and tourism expert, Mr. Bankole Bernard said more shake-up in airfare prices on the Lagos-London route should be expected.
Bernard emphasised that this move would compel foreign carriers to lower their fares or risk losing their foothold in the market.
Highlighting the significant price difference, Bernard noted that while foreign airlines previously charged as high as N3.5 million for a return economy class ticket, Air Peace now offers the same journey for N1.2 million. This competitive pricing strategy, according to Bernard, has prompted major players like British Airways, Virgin Atlantic, and Qatar Airways to adjust their rates to remain competitive.
“The entry of Air Peace into the Lagos-London route is a game-changer,” Bernard stated. “With their direct flights, other airlines are feeling the pressure to match their prices or face the consequences.”
Attributing the drop in fares to increased competition, Bernard stressed the need for transparency in the aviation industry, urging scrutiny of airlines’ pricing strategies.
“The emergence of Air Peace with its direct flights has disrupted the market dynamics,” Bernard explained. “As a result, other carriers must adapt swiftly or risk losing their market share.”