International Carriers Compete On Pricing In An Effort To Hinder Air Peace From London

PRICE wars have become an inseparable part of the actors in the fiercely competitive and fast-paced airline industry, acting as a survival tactic.

Although they are prevalent in the airline industry, pricing wars are a form of fierce competition in which airlines lower their costs in an effort to lure customers away from rivals. Reduced margins and profitability may be the automatic result of the following implication. Airlines require strategy and competitive intelligence, particularly competitive flight price data, to succeed in these price wars.

Since Air Peace, a Nigerian airline, started flights to London Gatwick on March 30, 2024, this is what is currently happening in the country's air transport business, with a focus on international flights.

Foreign airlines had long since monopolized the lucrative Lagos/London route and exploited Nigerian travelers by forcing them to pay the highest fares in the area while travelers from neighboring countries such as Ghana, Togo, and Benin Republic took advantage of extremely low fares. This continued until Air Peace entered the market.

Following the big carriers withdrew their lowest inventory fares, leaving Nigerians to contend with the highest inventory tickets, the outrageous fares charged by the international carriers peaked, with over $800 million of their profits stuck in Nigeria.

Airlines such as Virgin Atlantic raised economy class rates to N2.353,200 for a single seat due to the withdrawal of cheap inventory fares by international carriers, while business class fares on the Lagos-London route jumped to N5,345,700.

On the Lagos-Istanbul route, Turkish Airlines' economy class ticket increased to N874,661, while the business class ticket increased to N1,980,876.

Nigerian passengers on other international airlines, such as British Airways, Delta Air Lines, Lufthansa, KLM/Air France, Air Maroc, and Ethiopian Airlines, encountered a similar circumstance.

Prior to the international airlines banding together to raise their rates, business class tickets on the Nigeria-UK route cost between N800,000 and N1.2 million, while economy class tickets ranged from N400,000 to N650,000, depending on when they were booked.

Exorbitant rates placed such much financial strain on Nigerian visitors that those who could not afford them were compelled to postpone international travel, and some, like students, switched to neighboring nations where lower inventory fares were offered.

Even when the federal government paid a sizable portion of the trapped monies—the remaining funds are currently valued at approximately $29 million—the scam persisted.

The start of Air Peace flights to London, however, brought relief.

Fearful of losing their Nigerian clients to Air Peace, the international airlines have entered into price wars to survive, as Air Peace immediately revealed its tariffs, which were judged to be more reasonable and cheaper for Nigerians.

Investigations reveal that most international airlines that fly between Nigeria and London have teamed up to drop costs so much that they are now less expensive than those offered by Air Peace.

The foreign airlines are engaged in fierce competition for market share that could force smaller airlines out of business, severely damage profit margins, or even jeopardize Air Peace's existence. This is in addition to offering new incentives and more amiable marketing tactics.

Air France is enticing travelers to book economy class seats on the Lagos/London route between May 15 and June for N907,782 instead of the more than N2 million it charged previously, according to a pricing list.

British Airways has also reduced the amount it charges for the Abuja/London Heathrow route from around N3 million to N1,394,536. Virgin Atlantic has now reduced the price of an economy class ticket from Lagos to London from N2.353,200 to N980, 654,000.

Reacting to the international airline price wars, several major firms characterized the market as incredibly impatient and agile. They recommended that Air Peace drastically alter its strategy by allowing, “the world taste what it means to be a truly Nigerian brand. You could see the presence of intentionality in their campaigns. It shows a clear understanding of the market. They are unleashing on Air Peace products of insights derived from the algorithm in their passengers platforms. They know where these customers are, they have their details, they may even be engaging passengers directly.”

The major parties claimed that the unexpected fare cut will help the Nigerian bridal travelers. They did, however, express surprise at how the international airlines, who had initially refused to lower their fares, had suddenly done so in order to gain access to Air Peace.