Air Peace: Just Before The Crash

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Air Peace: Just Before The Crash
By Joseph Edgar

In this article, Edgar who is known as Duke of Shomolu warned Allen Onyema, the owner Air Peace that he may not be able to win the price war with bigger airlines who have been in the business before him.
He wrote

Mr Onyeama would be a poor businessman if he gets carried away with all of these nationalistic sentiments on something that is purely a business issue.

He triggered the price war by dropping the price and for which we are eternally grateful. His competitors with better resources have responded by taking the fight to him and are very well confident of sustaining this battle.

Mr Onyeama at this time must honker down and start looking at strategies for fighting this with sense because with time and in consideration of the many economic exigencies Nigerians face, a N300k to N500k price differential would not attract the average Nigerian to Air Peace no matter the patriotic favour.

I think it’s time, he should leave the sole trader mentality and get listed.

This means that he would have access to cheaper long-term funds, his valuation would be more transparent opening him up to better terms from international lenders and his corporate governance would kick in with its attendant impact on the bottom line.

He could also even have a dual listing with the same benefits. A London listing would open him up to other such benefits as a full taxpayer in that country

He should also be engaging the Federal Government on tax waivers, rebates, grants and other such ‘palliatives’

I think Mr Onyeama has worked too hard to let himself be carried away by the emotional dribbles of the fickle majority who litter the media space and who are faced with a tricky choice of an Air Peace flight to London at a 40% premium as against a better known international flight, would cover their faces and board the international flight while chatting up a storm in front of a BA air hostess as to why Air Peace is our National pride.

If Mr Onyeama doesn’t have serious-minded Financial Advisers already, he should get one now or else in the next 6 months, if this price war continues we may be having a candle night procession for his beautiful airline.
EDGAR is an investment bank and theatre producer

Joseph Edgar
Joseph Edgar
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