LOS- LGW: ‘ Fasten your seat belts, more aero- politics, turbulence ahead’
Akin to its politics, the international airspace is highly competitive and feisty. New entrants like Air Peace Airline already have their rough patches ahead of them. But how smoothly a carrier glides through to survival is partly a testament to in- built strength and the amount of pushback the ho me authority can summon on its behalf, WOLE OYEBADE reports.
Atime was when the Lagos- London route competition had Nigeria Airways and its British counterpart. It was a feisty battle, not between the national carriers, but between two sovereign countries. That was in the 90s.
The British, an imperial benefactor of Nigeria, wanted a big chunk of the market, and Nigeria Airways was the fall guy. One day in 1994, they met their march in General Sani Abacha, the then Head of State.
International air transport operates a slot system that mandates airlines to arrive on schedule to avoid congestion at busy airports. Nigeria Airways was accused of arriving late at Gatwick. Hence, it was banned from Britain.
As the news wafted across and details still being awaited in Nigeria, the military administration immediately slammed a ban on British Airways – including its flight that was already mid- air into Lagos Airport.
Travel Consultant, Sunday Olumegbon, recalled the incident with relish, describing it as a good example of “you do me, I do you ( reciprocity)”.
Olumegbon noted that the British had always threatened to sanction Nigeria Airways for flimsy infractions, and sometimes they actually did, opening a window for long- winding negotiations that took weeks or months to undo the ban.
“That case in 1994 was the shortest banning episode ever. I doubt it lasted 12 hours before England rescinded the ban on Nigeria Airways. That was how governments protect their national carrier and still do it for their flag carriers or any carrier that they see as their own,” Olumegbon said.
In 2011, it was the turn of Arik Air to complain about the “unfair and discriminatory” slot system at London Heathrow Airport.
Both BA and Virgin Atlantic ( VA) had ( and they still do) 21 frequencies in Nigeria weekly. But there was no slot for Arik Air, which warrants the airline to rent slots from British Midland International, at £ 14 million in three years.
A hint of the Federal Airports Authority of Nigeria ( FAAN) reducing BA’S frequencies from seven to three in retaliation immediately addressed the slot problem at Heathrow.
Paradise lost
The exit of Nigeria Airways, Arik Air, Bellview, and Medview Airline from the Lagos- London route left the bilateral corridor uncharted by Nigerian airlines for years – and therefore a huge relief when Air Peace ventured.
Air Peace, in about 10 years of operations, is the biggest indigenous carrier in terms of fleet capacity and traffic. It has about 40 aircraft on 20 domestic routes, 10 regional and seven international, including Johannesburg, Saudi Arabia and Beijing.
In about a week of operating on the Lagos- London route, the airline has mirrored Nigeria’s years of missed opportunities on the European route – and it should expect some pushback from the dominant legacy carriers.
Like a house on fire, Air Peace rolled out an unbeatable offer of N1.2 million round- trip economy tickets with discounts for students, on a route that foreign airlines had charged between N2 million – N4 million per economy class seat.
On its inauguration flight of March 30, Air Peace had its Boeing 777 at full capacity. The British Airways desk at Murtala Muhammed International Airport ( MMIA), Lagos, was unusually scanty.
The Air Peace ‘ fever’ was far- reaching across the London routes. Checks this week show that some foreign airlines have further slashed their fares to an average of N841,732.
At the Central Bank of Nigeria’s exchange rate of N1246/$ 1, checks on prices by most of the flights, as of Wednesday, show that Egyptair has dropped its Lagos- London economy ticket price further to ($ 470) N585,620. Air Peace London to Lagos now goes for ($ 655) N816,130, British Airways goes for ($ 787.99) N981, 848, Virgin Atlantic ($ 927.99) N1.1 million, and Royal Air Maroc ($ 456.99) N569,422.
Also, Rwandair has pegged airfare to ($ 545.35) N679,070, Ethiopian Air ($ 543.84) N677, 824, Turkish Airlines ($ 647.84) N807, 408, Air France London ($ 915.99) N1.1 million, while KLM pegged its price to ($ 927.84) N1.1 million.
Group Managing Director of Finchglow Holdings, Bankole
Bernard, noted that Air Peace has crashed airfares on the London route.
Bernard explained that there are two major destinations that Nigerians often ply to reach international destinations. The first is Dubai, which has been out for a while due to visa restrictions. “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.
“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 adjust quickly or they will be out of the market in no time,” Bernard said.
The Chairman of Air Peace, Allen Onyema, hinted at a ‘ price war’, suggesting that the foreign airlines are conspiring to force Air Peace out of international operations by crashing airfares on the route.
Onyema said foreign airlines operating the route “are fighting back and we are being deliberately frustrated in all ways”.
“It’s a very devilish conspiracy. All of a sudden, ( foreign) airlines are underpricing, below the cost, it’s not up to one month, an airline was advertising $ 100, another one $ 305, $ 350. Fill up the entire aircraft and carry people on the wings, it’s not even enough to buy your fuel. So, why are they doing that? Their governments are supporting them because Nigeria has been a cash cow for everybody,” he said.
Indeed, the airline has had a torrid beginning with space allocation at London Gatwick, a broken carousel, ground handling, delayed acknowledgement by the Airport Authority, and so on.
Sustainable support is key
Stakeholders, however, reckoned that such and even more should be expected, but to be handled with good tact and as country- to- country diplomacy.
Secretary of the Aviation Safety Round Table Initiative ( ASRTI), Olumide Ohunayo, explained that price wars and predatory pricing are not new in aviation, and are often deployed as business gimmicks to frustrate new entrants and perceived weak airlines in a deregulated market.
“It is a usual practice and not one for intervention from the authorities but how Air Peace can navigate through the price war. They ( Air Peace) have capacity issues, which is why they have gone into a leasing arrangement that will further increase their cost of operations. But they have a team and a board that must dig deep to see how they can mitigate the price war. You cannot stop it; it is a prize for competition.
“I can tell you that by the time Emirates Airlines also joins the route in June, the price will further drop. Air Peace should not be attempting to benchmark BA and Virgin, which are their direct competitors on the direct flight to London. They should begin to look at those airlines that have one or two stops. Those are the ones that will be the main problem for them. They need to work that out, and not ours to regulate fares. The airlines must sort themselves out on fares.”
He added that Nigerians are the highest number of passengers on that route, and should begin to patronise their own in the spirit of patriotism. It will keep the airline afloat in the collective interest.
“Moreover, Nigerians will benefit from the price war. With cheaper fares, more Nigerians will visit the UK or come home to visit relatives. So, it is good for consumers, but the airlines must find the right nexus to navigate those mines that are always temporary,” Ohunayo said.
Veteran in the aviation sector, Group Capt. John Ojikutu ( rtd), said it is incumbent on the current administration to start treating the emerging aero- politics as a country- to- country matter, instead of a business- to- business relationship. Ojikutu, a commandant of the Lagos Airport in the 90s, said Air Peace would survive on the route if it is properly designated as the Nigerian flag carrier ( in the absence of National Carrier) and accorded in the UK the same respect BA enjoys in Nigeria.
He said it is the responsibility of the Ministry of Aviation, in particular, and the Nigeria Civil Aviation Authority ( NCAA) to give support and introduce Air Peace to the UK Transportation Ministry and the UK CAA.
“We cannot fight the war securely and successfully with the foreign airlines. Over 90 per cent of our commercial aviation is in their hands with some Nigerian insiders ( threats) too.
“I observe that our government officials are talking to the ( UK) operators, not to their contemporary officials. That is highly ridiculous. The minister should not be doing the job of the operators or the regulator. The ministry signs the Bilateral Air Service Agreement ( BASA) and if there is a fault, pass it to your counterparts through the Embassy, not the Agbero war on the street of London.
“Those who are responsible for the commercial aviation in our government are doing only their bids, not Air Peace, and not the national bid. Don't board a plane to the UK to go talk to the operators; talk to the UK government, which you can do through the UK Ambassador in Abuja. Then, they will take us seriously,” Ojikutu said.
He added that most of the successive political officeholders had their hands tied to the multiple frequencies and destinations given to the foreign airlines and have found it difficult to untie themselves.
To solve the problem, “we must cancel whatever commercial agreements given to the foreign airlines for the multiple frequencies and destinations. Restrict them to Lagos or Abuja Airports and ensure they have interlining arrangements with local airlines for Nigerian in and outbound transit passengers at the airport of their first choice,” Ojikutu said.
“Those who are responsible for commercial aviation in our government are doing only their bids, not Air Peace, and not the national bid. Don't board a plane to the UK to go talk to the operators; talk to the UK government, which you can do through the UK Ambassador in Abuja. Then, they will take us seriously. ”