Connect with us

News

Air Peace: Strategies to Gain Competitive Advantage in the Battle for the Skies

Published

on

Kindly share this post

By Austin Okere

Congratulations to Air Peace on its inaugural flight to London and for achieving full bookings for the upcoming months, thanks to attractive ticket prices. Over the past fortnight, Air Peace has been making waves on social media for various reasons.

On a positive note, the airline shared a LinkedIn post featuring a picture of former Nigerian President, Chief Olusegun Obasanjo, aboard a return flight to London.

The caption highlighted his positive experience, stating, “I went, it was pleasant. I came back, it was even more pleasant.”

However, on a different note, Nigeria Stories recently reported that the United Kingdom Civil Aviation Authority has contacted Nigeria’s Civil Aviation Authority regarding alleged violations of aviation safety regulations by Air Peace.

The significance of Air Peace’s impact on airfares along the Lagos-London route cannot be overstated. Since commencing operations on March 30, Air Peace has maintained its round-trip economy ticket price at $1,000 (₦1.2 million), a substantial reduction compared to the previous rates charged by international airlines, which could soar up to $2,500 (₦3 million).

This bold pricing approach has disrupted the established norms, prompting foreign carriers to reassess their pricing frameworks.

To uphold customer loyalty and ensure long-term viability, it is imperative for Air Peace to explore additional strategies for differentiation. I have outlined these strategies using Austin’s Four Models of Competitive Strategies below:

  1. Technological Leadership

This approach is commonly embraced by firms that have secured a substantial leadership edge on the innovation spectrum. Their dominant position within their specific market niche is profound, making it exceedingly challenging for competitors to replicate or close the gap. Companies like Apple, Alphabet, Airbus, SpaceX, Netflix, and Tesla, among others, adeptly employ this strategy to significant effect.

Typically, they command premium prices for their offerings, allowing for greater investment in ongoing research and expertise, thus fortifying their technological supremacy and perpetuating their cycle of success.

  1. Service Excellence

This strategy is often embraced by companies that may not necessarily lead in technology but excel in delivery and customer experience to secure patronage and foster loyalty. Airlines like Emirates, Singapore Airlines, Qatar Airways, and Japan Airlines consistently rank among the world’s top 10 airlines as voted by travelers worldwide, thereby drawing more patronage.

3. Customer Intimacy (Personalized Customer Engagement)

This approach is predominantly employed by companies that strive to create a familial bond with their customers. They foster a sense of intimacy with their clientele, exemplified by Ghana’s Africa World Airways (AWA), which has established a reputation for punctuality in West African travel.

Air Peace appears to be following suit with this strategy, offering popular Nigerian cuisine and beverages on the Lagos-London route, and outfitting their crew in vibrant Nigerian attire. Companies employing this strategy often boast prolonged customer retention rates. They possess a deep understanding of their customers, accommodating their unique preferences, while customers reciprocate with steadfast loyalty.

  1. Cost Leadership

This strategy is predominantly adopted by companies that have enjoyed an early lead in product development and launch, leveraging the returns on their investments over time. They employ low pricing to dissuade competitors from entering the market. A classic example is Coca-Cola and Pepsi-Cola.

Additionally, other companies that may employ this strategy are those that have accessed the experiences and intellectual property of more advanced competitors without incurring the costs and challenges of research and development. They are content to price their products relatively lower to attract patronage.

Many established companies with mature infrastructure also aim to increase their market share through periodic sales promotions, satisfied with extracting contribution margin from fixed costs.

Airlines often utilize this strategy during low seasons to improve their load factor rather than flying with empty seats or cargo space. They prefer to capture customers at any price rather than allow competitors to benefit from lost sales.

Bringing it All Together

In the fiercely competitive landscape of the airline industry, pricing strategies serve as a cornerstone in attracting passengers and maintaining a competitive edge. Employing competitor pricing, a dynamic and data-informed approach, enables airlines to swiftly adapt to market fluctuations and consumer preferences while optimizing revenue streams.

Airlines continuously fine-tune their fares in response to market dynamics, competitive maneuvers, and various other factors, employing a seamless and automated process to uphold competitiveness, optimize load factors, and maximize revenue streams.

While competitive pricing may serve as an initial strategy to penetrate the market and garner market share, I am cautious about relying solely on it for sustained success. It’s essential to recognize that no matter how aggressively priced one may be, there’s always someone offering a lower fare.

This approach risks triggering a downward spiral in pricing, potentially leading to a race to the bottom. In such a scenario, financially robust incumbents may outlast vulnerable newcomers, only to subsequently increase prices to recoup lost revenue once the newcomers are forced out of the market. This fate should not befall Air Peace.

Austin Okere is a thought leader, and business mentor. An Entrepreneur-in-Residence at Columbia Business School, New York.

 

 


Kindly share this post

Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

News

TikTok Returns on Apple, Google US App Stores as Trump Delays Ban

Published

on

Kindly share this post

TikTok returned to the U.S. app stores of Apple and Google on Thursday as President Donald Trump delayed a ban on the Chinese-owned social media app and assured the tech giants they would not be fined for distributing or maintaining it.

The popular short video app used by nearly half of all Americans went dark briefly last month, before a law took effect on January 19 that requires its Chinese owner ByteDance either to sell it on national security grounds or face a ban.

The following day, Trump signed an executive order seeking to delay the enforcement of the ban by 75 days, allowing TikTok to continue its operations in the U.S. temporarily.

Although TikTok resumed service after Trump’s assurances, Google and Apple kept the app removed from their U.S. app stores.

TikTok, the second-most downloaded app in the U.S. last year, said on Thursday that its latest app was now available for download.

The delay could have been because Google and Apple were awaiting assurances that they would not be prosecuted for hosting or distributing the app, according to analysts.

Trump’s directive said the companies, which run mobile application stores or digital marketplaces where users can browse, download and update apps, would not face penalties for keeping the TikTok app up and running.

TikTok had more than 52 million downloads in 2024, according to market intelligence firm Sensor Tower.

About 52% of its total downloads were from Apple App Store, while 48% were from Google Play in the U.S. last year, Sensor Tower said.

The law that requires ByteDance to sell TikTok’s U.S. assets or ultimately face a ban was signed by then President Joe Biden last April, triggered by national security concerns and fears that China could use the video-sharing app to spy on American users.

The U.S. has never banned a major social media platform and the law that passed last year gives the government sweeping authority to ban or seek the sale of other Chinese-owned apps. Trump said on Thursday that his 75-day deadline on TikTok could be extended.

The turmoil at TikTok attracted several potential buyers, including former Los Angeles Dodgers owner Frank McCourt, who have expressed interest in the fast-growing business that analysts estimate could be worth as much as $50 billion.

Trump has said that he was in talks with multiple people over TikTok’s purchase and would likely have a decision on the app’s future in February.


Kindly share this post
Continue Reading

News

FG Order MDAs to Close Commercial Banks’ Accounts, Enforce TSA Policy

Published

on

Kindly share this post

Federal government has directed all Ministries, Departments, and Agencies (MDAs) operating in states to close their accounts with commercial banks and fully comply with the Treasury Single Account (TSA) policy.

FG Order MDAs to Close Commercial Banks’ Accounts, Enforce TSA Policy

Dr. Oluwatoyin Madein, accountant-general of the Federation,

The directive was issued by Dr. Oluwatoyin Madein, accountant-general of the Federation, during a working visit to the Federal Pay Office in Benin, Edo State.

This was disclosed in a statement released on Thursday by Bawa Mokwa, director of Press and Public Relations at the Office of the Accountant-General of the Federation.

Reaffirming the government’s commitment to the TSA policy, Madein warned that no MDA should operate accounts with commercial banks unless expressly approved by the President and officially communicated by her office.

The statement reads:

“While reiterating the Federal Government’s commitment to the Treasury Single Account policy, the Accountant-General of the Federation urged the Federal Pay Officers to monitor and ensure that Ministries, Departments, and Agencies in the States do not operate any account with the commercial banks or circumvent any provision of the TSA policy.”

She further stressed that any exceptions must follow strict guidelines, requiring presidential approval and formal communication from the Office of the Accountant-General.

Madein also tasked Federal Pay Officers (FPOs) with ensuring compliance, upholding transparency, and maintaining professionalism in their financial operations.

She warned against actions that could undermine the integrity of the Federal Treasury and emphasized the need for accurate financial record-keeping.

As part of ongoing reforms, she revealed that the Federal Government is constructing new Federal Pay Offices in some states to address infrastructure and operational challenges.

She assured that her office remains committed to the welfare of its personnel while enforcing compliance with financial regulations, including the Public Procurement Act and the Constitution.

Her visit to the Benin Federal Pay Office was part of a nationwide tour to assess the operations and challenges of Federal Pay Offices across the country.


Kindly share this post
Continue Reading

News

NBRDA Investigates Biocatalysts for Bioethanol Production

Published

on

Kindly share this post

National Biotechnology Research and Development Agency (NBRDA) is investigating the development of biocatalysts from underutilised bioresources through its Young Researchers Forum (YRF) research group for bioethanol production.

NBRDA Investigates Biocatalysts for Bioethanol Production

Prof. Abdullahi Mustapha, director general, NBRDA sated this in an interview conducted in Abuja on Wednesday

Biocatalysts, which can be either bacteria or enzymes, are biological entities that accelerate chemical reactions.

An alcohol-based fuel derived from renewable resources such as plants and algae is called bioethanol. It can be blended with petrol or used in place of it to cut down on petroleum use.

He asserted that bioethanol is crucial and that Nigeria has the means to fully investigate its possibilities, noting that the production of bioethanol will be helpful in setting up bioethanol plants.

“However, the catalyst for the fermentation of sugar to produce ethanol is what we are after, and we have it locally.

“When we isolate the biocatalyst, it is going to be useful in helping to establish a bioethanol factory, which will function very well due to our varying weather conditions,’’ he said.

Bioethanol has similar uses to fuels used to generate other classes of energy like heat, motor power, transportation, and electricity, the NBRDA chief added.

According to him, bioethanol is the most widely used biofuel in modern civilisation, and the process of turning biomass into bioethanol is receiving a lot of attention.

“Biological energies are renewable fuels with minimal pollution and play an important role in reducing greenhouse gas pollution, and one of them is bioethanol, which is obtained from fermentation operations.

“The world’s attention to the use of bioethanol as an energy source is focused on reducing the cost of production and increasing the efficiency of the ethanol industry.

“By consuming ethanol fuel instead of fossil fuels, the amount of greenhouse gas emissions known to be the cause of global warming will be somehow reduced,’’ Mustapha said.

According to the D-G, the creation of the Young Researchers Forum (YRF) demonstrates the agency’s efforts to support nation-building.

He added that young biotech innovators chosen from across the agency’s departments will use the conference as a training ground and launching pad.

The YRF, according to Mustapha, was a manifestation of his wish to establish an institutional framework for mentoring that would close generational divides.

He stated that one of the projects the YRF would concentrate on was the development of biocatalysts for the manufacture of bioethanol.


Kindly share this post
Continue Reading

Trending