By Dickson Omobola
The price war sparked by Nigerian carrier, Air Peace, with its entrant into the juicy Lagos-London route once monopolised by foreign airlines has triggered mixed feelings among stakeholders.
In the last two weeks, the talking points for the country’s aviation experts have been how would Air Peace survive what they describe as a deliberate campaign to run the indigenous airline out of business, and what could government and Nigerians do to rescue it from the price war.
Bothered by the development, a former acting Managing Director of the Nigerian Civil Aviation Authority, NCAA, Mr Benedict Adeyileka, in this interview, identifies numerous means by which Air Peace can come out of the battle unscathed. Excerpts:
What do you make of the price war?
The aviation world is a competitive market. It is a business and everybody has to sell. Yes, there is politics in it, but it also gives room for price fixing. Frankly, price fixing is a very difficult war to fight. There are reasons why the price went up before. First, there was demand. And once there is demand, the price goes up. It is just basic economic law. Second, they had no competition. We had no Nigerian airline doing international flights until Air Peace came into the picture. On its own, that drove the price down.
Succeeding
Nevertheless, let me put this on record. The foreign airlines would not have succeeded in doing this without the cooperation of Nigerians. Who are the people selling tickets in Nigeria? They are Nigerians. Who are the people giving them multi city designations? It is Nigerians. Who are the people allowing Lufthansa to come into Abuja, and from Abuja it goes to Port Harcourt? It is Nigerians. Nigerians are the people allowing Qatar to do the same. Let us be honest with ourselves.
Support
Since Air Peace operates in the West coast, one thing it should do is to go to all routes in the West Coast and bring all the passengers (from Accra, Sierra Leone) to Lagos. To do this, government needs to have a transiting facility in Lagos. We should have a transit facility because those kinds of passengers are not supposed to go through check in difficulties.
Like it is done in Doha and Istanbul, we don’t have an area for international or local transiting passengers. How long have we been operating in Nigeria that we don’t have one? First, if government wants to help, it needs to make it easier for Air Peace to do the same thing that its competitors do. Second, government can also send a memo out to all its officials, saying if you are traveling overseas on government funds, you can only fly Air Peace or a Nigerian airline, however, if they intend to travel on their personal funds, they can go on the airline of their choice. Honestly, Air Peace needs all the support it can get.
Patriotism
Unfortunately, I don’t see Nigerians as very patriotic people. Some people would refuse to fly Air Peace because of their slave mentality, they will say it is a Nigerian airline, it is not safe. Yet, they will go and fly a 60-year old British Airways or Lufthansa aircraft that was repainted and redecorated.
We need to be patriotic. In all fairness to Nigerians, this time, however, they are very patriotic because they have seen enough. We have suffered and we have been ripped off big time. Why were they charging us between N2 and N3 million for tickets that are now less than N1 million? Economy class went for that amount and some of them were non-refundable. And when you missed a flight, you lost the money.
On-time departure
Air Peace itself also needs to be able to compete, it needs to have on-time departure. When an aircraft is delayed or broken down, I know they have a plan b, but that plan b must be active. Sometimes, aircraft can break down, British Airways, Delta, Lufthansa all suffer from breakdowns, but the point is what happens when delays are experienced? Are you going to look after your passengers?
Those are the things Nigerians are asking for. Once Air Peace can do that, I can tell you that a lot of Nigerians will pay higher to fly Air Peace than to go on British airways. You can take that from me. Like every other citizen, Nigerians also want value for their money. For example, in the United Kingdom, Qatar carries passengers from the UK. People fly Qatar instead of British Airways or Virgin Atlantic. People fly Turkish Airlines, people fly Lufthansa, but this our case is different. The foreign airlines need to have a competitor, it is not just Air Peace. I wish other Nigerian airlines could come up. United Nigeria Airlines, Ibom Air also need to join in because it is competition that drives prices down.
Many are of the view that banks should offer the Nigerian carrier single digit loans to enable it to have the financial muscle in sustaining the price war. Do you agree with them?
It is very difficult to say that banks should give single digit loans. These banks also have what they call inter-bank borrowing. How much do they get the money for? The banks cannot get their money for eight per cent and lend it out for six per cent or get it for 10 per cent and give it out for nine per cent. It won’t work like that. Government can come in, the Bank of Industry, BOI, can come in and help. We have other specialized banks that can come in as well. One other question that we should ask too is: are the Nigerian operators going to be honest in their repayment of loans? It is a tough one.
Aircraft leasing
Government can also help with leasing of aircraft. The Minister is right about leasing companies not wanting to release their aircraft to the Nigerian operators. When Nigerian operators leased aircraft in the past, we agreed on the terms and conditions, but defaulted. The owner of the aircraft requested for their aircraft and we said they couldn’t have it. Now, for such not to be repeated, government must be able to say there is a Cape Town Convention that stipulates aircraft leasing conditions and they must be abided with.
Some experts are of the view that for Air Peace to come out of this unhurt, it needs to be designated as a flag carrier…
What is the definition of a flag carrier? I don’t know why people are talking about designating it as flag carrier. My own understanding of a flag carrier is flying under the Nigerian flag. British Airways is a flag carrier, Virgin Atlantic is a flag carrier, but they are not owned by the British government. They are owned by private individuals.
