Why Allen Onyema’s Air Peace London Flight route cannot be legally bullied by Foreign Airlines with price war- P. D. Pius, Esq.

There was so much celebrations when Allen Onyema’s Air Peace had their inaugural flight to London. We were happy that a local airline will compete with foreign airlines like BA, Emirates, Ethiopia Airline among others. For me what air peace is bringing to that international flight market is competition. A competition between local airlines and foreign airlines.

The foreign airlines have over the years enjoyed monopoly. So they could fix exorbitant prices and we have to patronize them. Not that I have ever flown to London. To pay a foreign airline 18M for 6 hours direct flight from Lagos to London is simply outrageous to me.

Air Peace has now brought competition and thus competitive price. If I recall correctly, the highest ticket for Air Peace is about 4M and they have tickets for 1.5M. This is reasonable. To remain in the market and compete, the foreign airlines responded by lowering their prices too. This was okay. But now they are starting a price war to chase away air peace and force them out of the market so they can maintain monopoly and eradicate competition from local airlines. I understand, this had happened to Medview airline in time past when Nigeria does not have the Federal Competition and Consumer Protection Commission Act, 2018.

It is reported that foreign airlines are now using their dominant position in the international flight market to offer flight tickets in ridiculously lower price below the marginal or average cost of offering that service. The plan invariably is to drive Air peace out of the market with this ridiculously low price and when they have crippled air peace, then return the price back to the exorbitant high rate. This is prohibited by Nigerian Law and in violation of section 72(2)(d)(iv) of the Federal Competition and Consumer Protection Commission Act, 2018 which makes this practice an abuse of dominant position in market place or industry. It is an anti-competitive practice prohibited by Nigerian Law.

There is no doubt that if the foreign airlines succeed in forcing Air Peace out of the international flight market, it will result in local job losses for Nigeria, affect our foreign exchange gains and invariably affect our economy. Thus, it is a suitable situation for the intervention of the Federal Competition and Consumer Protection Commission to investigate and take action.

The Commission is empowered to penalize an offending business undertaking or company by charging 10% of their last annual turnover. Imagine, Nigeria getting 10% of turnover of all foreign airlines that maybe found liable. Interestingly, the regulators abroad will not spare a Nigerian company that violate a similar rule abroad.

The commission can also in a worse case scenario ground the operation of the offending airlines if liability is established.

I hope the Commission and Air Peace find this useful to keep our local airline in competition with foreign airlines in the international flight market.

P. D. Pius, Esq., ACIArb.(UK)
Abuja, Nigeria
pius@pdpiusandassociates.com