AON: Predatory Pricing by Foreign Airlines Aims for Future Exploitation of Nigerians

Chinedu Eze

Predatory pricing introduced by foreign airlines when Nigeria’s carrier, Air Peace, joined the Lagos-London flight services, was targeted at Nigerians and aims to push out the only domestic carrier on the route, then they multiply the cost of ticket to London.
Spokesman of Airline Operators of Nigeria (AON) and Chairman of United Nigeria Airline (UNA), Prof. Obiora Okonkwo, who gave this position, explained the reason international operators crashed airfares to London from Lagos.

Speaking on Arise TV at the weekend, Okonkwo said the international operators were engaged in ‘anti trust’ practice, which he described as a criminal offence and urged the federal government to prosecute those engaged in it.
“What is happening is very clear. Nigerians should not misunderstand price war with a clear conspiracy to take Air Peace out of the market. The foreign airlines have made adjustments to their prices and I see some of them as predatory prices.

“These are prices that they have conspired to reduce, which is lower than that of Air Peace to make sure they get back passengers. Nigeria is a huge country and even if Air Peace flies five times a day, they can’t take all the passengers to London.
“So, that would have been enough consolation for the foreign airlines to remain where they are if they meant well. But this is predatory pricing, it is not a price war.

“This is what they are doing. They would lower their prices because they have a longer staying power because British Airways can easily write off $50 million loss to keep Air Peace out of the market and they would not take a hit because they can go and get $1 billion loan at zero interest rate or even at one percent.
“What it means is that Air Peace would be flying and losing money for months. They have their obligations to the banks at 30% interest  and they would be out of the market. When Air Peace goes out of the market, or United Nigeria that is definitely joining soon, then they go back to their old prices.

“So, I am calling on the Nigerian government to watch out because there is what we call ‘anti trust’, which is the process of deploying certain strategies to undermine the competitive capacity of your competitor, which is what is going on,” he said.
Okonkwo also explained that the foreign airlines should be called to question.

“How do you drop your fares from N3 million to N1.3 million? Even though Nigerians are rejoicing over it, there is an element of economic sabotage. The Nigerian government needs to interrogate this. If you do that in the US, you would be called for questioning.
“What is going on is that they want Air Peace and any prospective Nigerian operator that would ply that route, to go out of business. This is not in good faith. The Nigerian government must have to protect our national interests.

“The aviation sector contributes $3.5 trillion to the world GDP. It supports the employment of about 90 million people worldwide. The federal government should ask what percent of this amount we are benefiting from.
“United Nigeria has gotten designation to the US but already, they are fighting us there. We had applied to the FA for certification and they said we have an issue to clear up with United Airlines because of similarities in the name.These are ways in which they want to put a stumbling block but the matter is in court in Nigeria.

“These are the kinds of challenges we go through and that is why at every stage, we need the government’s support. It is a criminal act to engage in anti-trust activities and the government should sue them in Nigeria and in other countries,” he said.