As was the case not long ago, the Nigerian government says its plan to enable local airlines to run international routes would further break the monopoly in the country’s aviation space. Festus Keyamo, the Minister of Aviation and Aerospace Development in a YouTube interview with O’tega Ogra, a foremost marketing and communications professional, said the government has begun the process of ensuring domestic airlines in the country run direct flight operations to the United States and South American countries.
If successful, the government hopes the step will increase competition and drastically reduce airfare.
Using competition to reduce airfare is not alien to the Nigerian aviation sector. A few months ago, a Nigerian major air carrier, Air Peace, secured a deal to fly to the United Kingdom from Lagos and pegged its flight ticket prices at a record low compared to its foreign counterparts. At that time, foreign airlines charged between N15 million to N17 million for business class and N5 million for the economy. However, Air Peace’s opening price for economy stood at N1.2 million for a round-trip journey and N4.5 million for business class.
The atmosphere was full of jubilation in Nigeria, as the citizens celebrated a liberation from the foreign airlines that had enjoyed monopoly and extorted the passengers with inflated airfare for a long time.
Air Peace’s new price pulled many customers that the foreign airlines realised it was high time they danced to the new reality or got beaten out of the market. A few weeks later, airlines like British Airways reduced its Economy ticket from N3 million to N1.7 million and its business class from N11 million to N6.8 million. The same story for Virgin Atlantic, Ethiopian Airlines and others.
Festus Keyamo, the aviation minister said British Airways has enjoyed plying Lagos to London route for so many years unchallenged, despite several attempts by the local airlines to run the same. “That was why Nigerians were buying tickets for as much as N15 million to N16 million at some points, [for] business class tickets.”
“So we put our foot on the ground, dusted off the BASA [Bilateral Air Service Agreement], and ensured that they (BASA) were respected,” said Keyamo.
“When they (foreign airlines) later conceded that Air Peace could start flying the routes, we knew we had achieved something. You saw the immediate results as prices began to dip. But that’s not the only lucrative route we have in Nigeria, we have other routes coming up,” he added.
The new routes are the United States and the South America. According to Festus Keyamo, the Nigerian government is working on new BASAs with several sovereign nations in the areas to secure flying routes for domestic airlines.
“BASA are negotiated between different sovereigns. So it is when you get your BASA and the reciprocal rights that you can give to your local operators and ensure that they are enforced as per the foreign entities,” he said.
“That is just one aspect of helping the local airlines to enforce the BASA by telling the countries that these are our flight carriers so that they can respect them as Nigeria representatives, not as just private businesses in the country.”
“So we did that; we wrote several letters; we travelled back and forth because we knew that that was what we could use to bring down prices. The only thing that can bring down prices in any market is competition. It is not a monopoly,” the Minister added.
