Airfare: War of words

By Francis Ajuonuma and Anthony Otaru

The Federal Competition and Consumer Protection Commission (FCCPC) and Air Peace management are at each other’s throats over a hike in airfare and the alleged arbitrarily canceled flights without care or compensation for passengers. The Minister of Aviation and Aerospace Development, Festus Keyamo, has criticized the FCCPC for publicly questioning Air Peace’s pricing practices.

Recall that Air Peace was accused of instigating an increase in flight tickets, a development it denied. This forced FCCPC to commence an investigation to ascertain the facts of the allegation.

However, in its latest statement, the FCCPC cautioned Air Peace management against obstructing ongoing inquiries on consumer rights violations or facing severe consequences.

The Commission notes with consternation Air Peace’s latest outburst, which is part of a series of ploys calculated to obfuscate the issues and distract the Commission from the ongoing inquiry into alleged exploitative ticket pricing.

The FCCPC noted that last Thursday, it had to refute a report syndicated in a section of the media that grossly misrepresented the proceedings at a meeting between its officials and the Air Peace team earlier on December 3 at the Commission’s Abuja office as a follow-up to an avalanche of petitions received from passengers recently.

It 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 camera, the FCCPC chose to perform the December 3 session in camera as a gesture of good faith to preserve the confidentiality.

The Commission also noted, “In the December 5 statement, the FCCPC restated that the inquiry was still ongoing, urging the public to be wary of manufactured news since the report was not disseminated on the Commission’s official communication platforms.

However, in a dramatic turn of events on Friday, Air Peace addressed a press conference in Lagos where it made several claims.

Accordingly, “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, stating that no undertaking shall offer to supply, supply, or enter into an agreement to provide goods or services at a price or on terms that are manifestly unfair, unreasonable, or unjust.

“It noted that under 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.

It stressed that the inquiry into Air Peace’s pricing practices stems from allegations of unjustified fare increases on bookings for specific domestic routes, lack of transparency in pricing structures, and practices that potentially contravene consumer rights and fair competition principles.

It further said, “Even more disturbing was Air Peace’s assertion at the press conference that between N500,000 and N700,000 should be the ideal fare for a one-hour domestic flight in Nigeria.

That recent singular action by a competitor has led some petitioners to ask whether Air Peace’s fuel is being imported from the United States at a higher cost.

Some other petitions before the Commission accuse Air Peace of instigating other airlines (which ironically possess far smaller fleets individually) to hike fares in the local aviation industry.

Also, some petitioners have accused Air Peace of canceling flights arbitrarily without caring for or compensating passengers. Only penultimate Friday (November 29), the domestic wing of the Nnamdi Azikwe International Airport witnessed a rampage by irate passengers of Air Peace at 10pm following a 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 use their tickets on another day after suffering untold inconveniences due to flight delays or cancellations earlier, they were asked and forced to pay a 50 percent surcharge.

“These are some of the weighty issues the Commission is investigating to ensure Nigerian passengers are not unduly exploited through price-fixing and gouging.

“To avoid 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 to take the appropriate action by the provisions of the FCCPA.

The Commission, however, 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.

It noted, “The Commission is committed to safeguarding consumer rights, promoting market fairness, and fostering a competitive and transparent marketplace across all sectors, including aviation.

However, the Minister of Aviation and Aerospace Development, Festus Keyamo, has criticized the FCCPC for its public statement questioning Air Peace’s pricing practices.

Reacting to the faceoff between the Commission and Air Peace, Keyamo said that the FCCPC should have consulted with the Nigeria Civil Aviation Authority (NCAA) before making public remarks about the airline’s pricing.

Keyamo stated during yesterday’s interview on The Morning Show on Arise News TV.

When asked about the FCCPC’s investigation into Air Peace’s alleged exorbitant airfare, he emphasised that the NCAA, not the FCCPC, regulates airline pricing. The Commission should have approached the authority for clarification before issuing its statement.

“I think it was a very careless statement – I say that with all apology – by the agency, making such a statement without consulting the core agency involved in regulation, which is the NCAA,” the Aviation Minister said.

He added, “They should have contacted the NCAA to have them look at the books, which we have been doing, so we would have given them the facts.”

Addressing the core issue, Keyamo explained that the challenges faced by Nigerian airlines, including Air Peace, are not driven by price gouging but rather by significant capacity limitations. These challenges include the difficulty in acquiring and servicing aircraft and the impact of fluctuating foreign exchange rates on the cost of operations.

The Minister pointed out that many Nigerian airlines rely on wet leasing aircraft, which incurs additional costs.

Recall that the FCCPC launched an investigation into Air Peace, GTBank, and MTN over consumer complaints, focusing on allegations of exploitative pricing by Air Peace.

The airline’s Chief Operating Officer, Oluwatoyin Olajide, clarified that rising operational costs, including N7 million for fuel and $4,000 for aircraft leasing per one-hour flight, justified the higher fares.

In October 2024, Nigeria improved its compliance with the Cape Town Convention, marking a significant step toward better leasing conditions for local airlines.