By Sade Williams
The Federal Competition and Consumer Protection Commission (FCCPC) has cautioned Air Peace against obstructing the Commission’s ongoing inquiry into alleged exploitative ticket pricing among other potential violations of consumers’ rights.
A statement by Ondaje Ijagwu, Director, Corporate Affairs, FCCPC, accused the airline of bringing to the media ‘a series of ploys calculated to both obfuscate the issues and distract the commission from the inquiry’
According to the Commission, “Last Thursday, we had to refute a report syndicated in a section of the media which grossly misrepresented the proceedings at a meeting between its officials and Air Peace team earlier on December 3 at the Commission’s Abuja headquarters, as a follow-up to an avalanche of petitions received from passengers in recent times.
“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. “, it stated.
It accused Air Peace of attributing ‘unfounded but prejudicial statements to the Commission’s officials, categorically declaring that “Air Peace was not under investigation”
It also accused the airline of ‘making several outlandish claims and innuendos obviously intended to whip up sentiments but conveniently avoided addressing the real issues” at a press conference recently.
“For instance, in asserting that only the aviation regulatory agency could inquire into its affairs, Air Peace only betrays a terribly poor understanding of both the legal and moral pillars of its operating environment. Passengers are consumers of its services.”
While asserting that passengers’ rights are inalienable and guaranteed under the FCCPA as it is the basis of the Commission’s intervention, it explained further that: ‘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.
“The inquiry into Air Peace’s pricing practices stems from 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.”, it added.
FCCPC also faulted Air Peace alleged claims that the sum of between N500,000 and N700,000 should be the ideal fare for a one-hour domestic flight in Nigeria, saying also that the claim it spends an average of N7m to fuel an aircraft for a one-hour flight was untrue.
“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. “, added.
Meanwhile, Aviation and Aerospace Development Minister, Festus Keyamo has said that the FCCPC should have contacted the Nigeria Civil Aviation Authority (NCAA) directly on the mater rather than going public.
Keyamo, in an interview with ARISE NEWS on Sunday, said: “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 power to regulate these airlines and for the airlines to inform about their price increase and all of that is domiciled in NCAA; that is the core agency
“They should have contacted the NCAA for them to look at the books, which we have been doing, so we would have given them facts. But to single out a few airlines that we are struggling to expose to the world for them to get more enhanced capacity, it was a bit careless,” he added
Keyamo went on to emphasise that the issue at hand was not one of exploitation but rather the airline industry’s capacity limitations, especially regarding aircraft acquisition and servicing routes
He said, “What we are facing is a problem of capacity of the airlines to acquire aircraft and to service their routes. Again, we have things that are totally out of our control, which is the issue of the fluctuation of the forex, the exchange rate, that affects everything in aviation. Everything in aviation is dollar based.
He then mentioned that Nigerian airlines spend majorly foreign exchange due to the nature of their business.
“All of these are foreign exchange, and with the fluctuating nature of our naira against the dollar, you will expect that it will affect also their cost of operation. Now, what we are therefore doing is to ensure that we expose them to the markets across the world where they can now access aircraft on very good terms, and this will impact on the prices of tickets and their cost of operation. That is what led us to addressing the issue of the practice direction pursuant to the Cape Town Convention. That is the core of the problem of the aviation industry that this president and vice president graciously supported us to get to, and we are there now,” he said
