- •Agency warns airline against obstructing inquiry
The National Association of Nigeria Travel Agencies (NANTA) yesterday called for the extension of the probe of the Air Peace Airline infraction to other airlines by the Federal Competition and Consumer Protection Commission (FCCPC).
The FCCPC is investigating the airline over alleged exploitative ticket pricing and violation of consumer rights.
The commission headed by Mr. Tunji Bello, journalist and lawyer, warned Air Peace against obstructing the inquiry.
According to the NANTA, the inquiry should be extended to other domestic and international carriers to make it total.
NANTA President Yinka Folami, said the state of service and pricing of domestic travel operations in Nigeria fell short of the required standards.
The umbrella body said it will continue to pursue advocacy in the downstream aviation sector and focus on equitable market practices, policies and protection of consumers.
It said the FCCPC has the capacity to consult for sector-expert opinions in similar consumer commissions and boards with arbitration on sector-specific issues.
NANTA said in a statement in Lagos: “We support inquiry into the arbitrary pricing structure of airfares in our market both domestic and international.
“ There is an increasing imbalance between taxes and basic fares, particularly YQ taxes fuel surcharge/emergency taxes, which need to be explicit in the interest of fairness to the Nigerian traveler and market. We offer our knowledge and expertise in the inquiry into significant delays, cancellations, and poor customer care to the Nigerian traveler, and inquiry into Cross-Border Trading, which is price discriminatory to our market, circumventing, and extractive to our national economy.”
It added: “ Our local airline players refer to the global pricing structure only when it is convenient. For example, our experience with global pricing is that you can purchase in advance.
“What happens in our domestic routes pricing/publication is that you cannot purchase three months in advance.
“Since September 2024, it has been practically impossible to purchase December 2024 tickets on lower classes/fares. Initially, fares were not displayed in advance, which is contrary to global practice. When they were displayed, all lower classes, particularly to a particular region in Nigeria, were frozen.
“All you can buy is just one class , the highest price class. This, in our view, is arbitrary and validates the FCCPC’s suspicion of discriminatory pricing. It also runs in conflict with our professional teachings that airline pricing is predominantly determined by flown mileage.
“We, at NANTA, are experienced enough to understand that aviation should not be presented to Nigeria as philanthropy. Aviation is the backbone of connectivity and must be driven by strong corporate governance, respect for consumer rights, and respect for government structures that are created by Act to protect consumers”
NANTA called for the protection of consumer rights against anti-consumer services and discriminatory pricing and the extension of the inquiry beyond one airline.
It added: “Aviation is a serious business, with high requirements for consumer-centrism. Therefore, we should stop being skeptical and cynical about consumer rights and about the responsibilities of the FCCPC.
“We should all work collaboratively to respect and strengthen this laudable government commission. We at NANTA stand ready for this patriotic task.
“We firmly lend our support and expertise where needed to price and service inquiry in the sector which, in our opinion, is long overdue. And if collaboratively prosecuted, it is a win for the Nigerian traveler and a win for all.”
Experts in the industry urged support for the FCCPC to execute its mandate, saying similar agencies in other countries, including the United States Department of Justice, has powers to investigate antitrust and anti competitive issues including price gouging.
An expert said : “ The FCCPC in Nigeria is vested with such powers. Approval of fares rests with the Nigeria Civil Aviation Authority’s Directorate of Air Transport Regulation which should also be able to offer fare guidance based on the filings of the airlines with them.”
In the United Kingdom for instance, British Airways was heavily fined in 2007 by The Office of Fair Trading for price fixing . OFT is the British equivalent of FCCPC. The court used Richard Branson Virgin Atlantic as star witness.
FCCPC cautions Air Peace against obstructing inquiry
FCCPC frowned at the Air Peace’s outburst over the probe, saying that it lacks justification.
A statement by the Director of Corporate Affairs , Ondaje Ijagwu, said the carrier is disingenuously deploying ploys to obfuscate the issues and distract the Commission from the inquiry into the alleged exploitative ticket pricing and violations of consumers’ rights.
The Commission refuted a report that misrepresented the proceedings at a meeting between its officials and Air Peace on December 3 at the Commission’s Abuja office, following the petitions received from passengers.
Ijagwu said: “Although Section 33 of the Federal Competition and Consumer Protection Act (FCCPA) 2018 grants the Commission discretionary power to conduct inquiries in public or in camera, the FCCPC chose to conduct the December 3 session in camera as a gesture of good faith to preserve the confidentiality.”
According to him, there was an unfounded report that “Air Peace was not under investigation” while its chairman, Mr. Allen Onyema, engaged in self-adulation.
The report omitted a boastful statement by Onyema at the meeting that he could decide to shut down the airline, ostensibly to show that he was doing the country a favour by flying.
In the December 5 statement, the Commission restated that the inquiry was still ongoing, urging the public to be wary of fake news, since the report was not disseminated on the Commission’s official communication platforms.
At the weekend, Air Peace tried to whip up sentiments at a press conference in Lagos while avoiding the real issues. For instance, in asserting that only the aviation regulatory agency could inquire into its affairs, Air Peace only betrayed a poor understanding of both the legal and moral pillars of its operating environment. Passengers are consumers of its services. Their rights are inalienable and guaranteed under the FCCPA. It is the basis of FCCPC’ intervention.
Ijagwu said:” As stipulated in Section 17(e) of the FCCPA 2018, the FCCPC is mandated to carry out inquiries considered necessary or desirable in connection with any matter falling within the purview of the Act. Furthermore, Section 127(1)(a) empowers the FCCPC to ensure that pricing practices across all sectors, including aviation, are fair, competitive, and non-exploitative. “Specifically, it states that no undertaking shall offer to supply, supply, or enter into an agreement to supply goods or services at a price or on terms that are manifestly unfair, unreasonable, or unjust.
“Pursuant to Section 148(3)(c) of the FCCPA 2018, the FCCPC, upon receipt of a consumer complaint, can direct an inspector to institute an inquiry and investigate the matter as quickly as practicable to determine whether the undertaking has acted inconsistently with the provisions of the Act.”
Ijagwu said the inquiry into Air Peace’s pricing practices followed allegations of unjustified fare increases on advance bookings for certain domestic routes, lack of transparency in pricing structures and practices that potentially contravene consumer rights and fair competition principles.
He added:” Even more disturbing was the assertion by Air Peace at the press conference that the sum of between N500,000 and N700,000 should be the ideal fare for a one-hour domestic flight in Nigeria. It claimed it spends an average of N7m to fuel an aircraft for a one-hour flight. But some of the petitions by consumers before the Commission strongly contest such claim. The argument is made that the typical Boeing 737-500 flown by Air Peace takes N4m to fill a tank of 4,500-litre Jet A1 capacity. With a full load of 120 passengers by a Boeing 737-500 vessel, a whopping N24m is earned when a one-hour flight is sold at the current average of N200,000. At the N500,000 being proposed by Air Peace as the “most ideal fare”, it then means a Boeing 737-500 would be fetching a whopping N60m per one-hour service!
“Interestingly, at a time Air Peace proposes N500,000, another airline has reduced fare to N80,000 on not just one-hour Abuja-Lagos flight but also on other domestic routes, thereby demonstrating that affordability and operational sustainability can coexist in the same operating environment. That recent singular action by a competitor has led some petitioners to ask whether the fuel Air Peace uses is being imported from the United States at higher cost.
“Some other petitions before the Commission accuse Air Peace of being the one instigating other airlines (which ironically possess far smaller fleet individually) to hike fares in the local aviation industry.
“Also, some petitioners have accused Air Peace of cancelling flights arbitrarily without care nor compensation for passengers. Only penultimate Friday (November 29), the domestic wing of the Nnamdi Azikiwe International Airport witnessed a rampage by irate passengers of Air Peace at 10PM following more than four-hour delay on the Abuja-Lagos service, thereby threatening public peace. It took the intervention of a combined team of security agents to restore normalcy that night at the nation’s premium international gateway.
‘Passengers have also complained that when they sought to utilise their tickets on another day after suffering untold inconveniences of flight delay or cancellation earlier, they were asked and forced to pay 50 per cent surcharge.
“These are some of the weighty issues the Commission is looking into with a view to ensuring that Nigerian passengers are not exploited unduly through price-fixing and gouging.
“For the avoidance of doubt, let it therefore be noted that no amount of blackmail or cowboy tactics can stop the Commission from the ongoing thorough investigation of the allegations against Air Peace with a view to taking the appropriate action in accordance with the provisions of the FCCPA.
“The Commission reassures the public that it remains resolute in its mandate under Section 104 of the FCCPA, which establishes the Act as the principal legislation governing competition and consumer protection in Nigeria.
“The Commission is committed to safeguarding consumer rights, promoting market fairness, and fostering a competitive and transparent marketplace across all sectors, including aviation.”
