According to Bankole Bernard, the former president of the National Association of Nigeria Travel Agencies, Air Peace’s pricing policies have forced international airlines to lower their rates in order to compete in the market.
Speaking on Tuesday on Channels Television’s The Morning Brief, Bernard stressed that foreign airlines risk losing business if they don’t change the pricing of their tickets on the Lagos-London route.
This information was made public when Air Peace recently began advertising tickets for a competitive N1.2 million on direct flights to London’s Gatwick Airport.
The airline operated a Boeing 777 with 274 seats on its first journey to London on Saturday, carrying 260 passengers.
Lagos will provide daily service to the route. Due to the change in market dynamics, foreign airlines who had previously enjoyed exclusivity on the route are now compelled to reevaluate their pricing strategy.
He emphasized the importance of Air Peace’s arrival into the market and how it has compelled international carriers to review their pricing strategies in order to keep their market share.
Bernard said, “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).
“There are two major destinations that Nigerians ply. Number one is Dubai and Dubai has been out of it for a while now. 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 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 that is different from the conventional ones. The supply that we now have, that is Air Peace, which is a direct flight, will put pressure on every other route. So, all the other airlines are forced to quickly adjust or they will be out of the market in no time.”
There was a significant price difference between the tickets that were sold on March 4, 2024, and Saturday, according to a study made by Wakadaily.
The price of a round-trip economy class ticket from Lagos to London fluctuated as of Saturday between various carriers.
It was available for N1,102,563 from RwandAir Express, N1,628,675 from Royal Air Maroc, and N1,641,249 from Ethiopian Airlines.
He also said that international airlines using the four main airports—Lagos, Abuja, Port Harcourt, and Kano—are making good money and aren’t up against much competition.
Bernard argued that the airlines would not have needed to openly protest about accumulating hoarded funds if they had been successful.
He suggested creating an audit committee to look into the causes of these backlogs.
About two weeks ago, the CBN said that the $7 billion in legacy debt, which comprised forward contracts denominated in foreign exchange among other debts, had been fully paid off.
However, the CBN ruled that roughly $2.4 billion of the $7 billion debt was invalid, citing a number of violations including incorrect documentation that prevented it from being validated. After the CBN announced two weeks ago that the last backlog had been cleared, commercial banks were still settling their accounts with foreign airlines in order to make the final payment.
