Responses to ultimatum given to British carriers

The minister of aviation ordered British Airways and Virgin Atlantic to lower their prices or be banned from the Nigerian airspace:

The Federal ministry of Aviation has given the British Airways, Virgin Atlantic and all international airlines operating in the country a 30-day ultimatum beginning from Monday, March 26, 2012  to dismantle the regional fare imbalance between what Nigerian passengers pay for international flights and their counterparts in the West African sub-region or face an immediate ban from operating in Nigeria.

In response, the British government warned that it would take retaliatory steps against Nigerian airlines:

Reacting to the ultimatum last night, Britain said banning private airlines would amount to a “heavy-handed action that would be catastrophic.” Consequently, Britain said it would not hesitate to retaliate if the federal government goes ahead with the threat to ban after 30 days. Britain said only business and first class fares were more expensive to Nigerians than neighbouring countries because of high demand for those seats.

“It is wrong to suggest that Arik has been prevented from flying into Heathrow. Our understanding is that Arik is just unwilling to pay for the cost of renting or buying landing slots,” the British spokesman said. He added that it was something all airlines who want new slots into Heathrow needed to do.

British Airways stated that:

All of our fares are set on a sound commercial basis and remain fully competitive with other carriers in the region including Arik Air.

It may be recalled that earlier this year a panel in Nigeria set aside a $235 million fine levied against British Airways and Virgin Atlantic by the nation’s government over allegedly fraudulent fuel surcharges on tickets. The panel of experts issued a ruling that the Nigerian Civil Aviation Authority lacked the regulatory power from 2004 to 2006 to fine the airlines, the period authorities alleged the price-fixing took place.

The whole saga begun when Arik Air complained that they could not secure landing slots at London Heathrow for their Abuja-London service, after which Nigeria called for a review of the BASA-aggreement.

With regard to the complaints about price disparity, it is surprising that all the reports only focus on the prices for business and first class (with comparatively strong demand in Nigeria) rather than economy class, the operational costs at Lagos airport in relation to those in other west-African cities are not taken into account either, and finally many other airlines – domestic and foreign – charge relative high prices to/in Nigeria due to the obsolete infrastructure and high operating costs. The whole issue of high ticket prices requires a broader approach and more structural policies from the Nigerian aviation authorities, rather than targeting particular airlines by interfering in the market.

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One response to “Responses to ultimatum given to British carriers”

  1. Greg says :

    Nobody is fooled by the line that our economy will suffer because BA stopped coming. Yes, the high rollers will be like fish outside water when they can’t breathe BA air on the shuttle to London, but that’s a different thing than saying our people will crumble because BA stopped coming. They were thrown out by Abacha when London’s policies defied even a six year old’s logic, in 1997/98, and the heavens did not fall. This time, if they get chucked out, the heavens won’t fall also. And I certainly hope they’re thrown out.

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