The Federal Competition and Consumer Protection Commission (FCCPC) has warned Air Peace airline against distracting the Commission from the ongoing inquiry into alleged exploitative ticket pricing among other potential violations of consumers’ rights.
Speaking on the outburst of Air Peace airline against the FCCPC, the director, Corporate Affairs, Ondaje Ijagwu, accused Air Peace of making several outlandish claims and innuendos obviously intended to whip up sentiment but conveniently avoided addressing the real issues.
Ijagwu further accused Air Peace of misrepresenting proceedings between its officials and Air Peace’s team on December 3 at the Commission’s Abuja headquarters.
He said, “The FCCPC notes, with consternation, the latest outburst by Air Peace in what seems a series of ploys calculated to both obfuscate the issues and distract the Commission from the ongoing inquiry into alleged exploitative ticket pricing among other potential violations of consumers’ rights.
“Last Thursday, the Commission 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.”
According to the agency, although Section 33 of the Federal Competition and Consumer Protection Act (FCCPA) 2018 grants the Commission discretionary powers to conduct inquiries in public or in camera, it chose to conduct the December 3 session in camera as a gesture of good faith to preserve confidentiality.
“But no sooner had the session ended than leaks appeared in the media attributing unfounded but prejudicial statements to the Commission’s officials, categorically declaring that ‘Air Peace was not under investigation’ and copiously quoted the Air Peace’s chairman, Mr. Allen Onyema, engaging in ostentation of self-adulation.
“Curiously, the same media leaks omitted a boastful statement by Mr Onyema at the same December 3 engagement that he could decide to shut down the airline, ostensibly to show he was doing the nation 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 manufactured news since the report was not disseminated on the Commission’s official communication platforms.”
The FCCPC spokesman stated that on Friday, Air Peace addressed a press conference in Lagos where it made several peculiar claims and innuendos obviously intended to whip up sentiments but conveniently avoided addressing the real issues.”
He also stated that Air Peace’s statement that only the aviation regulatory agency could inquire into its affairs showed the Airline’s 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,” he clarified. “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.”
He added that Section 127(1)(a) empowered 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.
According to him, 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.
“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 fares 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 a higher cost.”
He also stated that 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 Azikwe 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 a 50 percent surcharge.”
According to him, there are other weighty issues the Commission is looking into with a view to ensuring that Nigerian passengers are not exploited unduly through price-fixing and gouging.
The FCCPC declared that no amount of blackmail could stop the Commission from the ongoing thorough investigation of the allegations against Air Peace.
“The Commission is committed to safeguarding consumer rights, promoting market fairness, and fostering a competitive and transparent marketplace across all sectors, including aviation,” Ijagwu added.
Meanwhile, the minister of aviation and aerospace development, Festus Keyamo, on Sunday said the FCCPC should have contacted the Nigeria Civil Aviation Authority (NCAA) directly instead of going public with its probe of Air Peace over pricing and poor service delivery.
Keyamo, speaking on Arise TV, said NCAA is the core agency involved in regulating the aviation sector.
“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 to inform them about their price increases is domiciled in the NCAA, which 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 said.
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 explained that Nigerian airlines spend mainly foreign exchange due to their need to hire aircraft, which he referred to as wet leasing.
“All of these are foreign exchange, and with the fluctuating nature of our naira against the dollar, you will expect that it will also affect their operational cost.
“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 address 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.
Keyamo then revealed that in January, he would lead a Nigerian delegation to Dublin to meet major airline financiers and discuss how to access aircraft at better rates, a move he believes will positively impact ticket prices and operational costs.
“All the major airline financiers, aircraft financiers, and liaisons are all gathered there (in Dublin), and for the first time, they have invited Nigeria to say, because of what we have done, because all these efforts we have made to make them access these markets around the world, has increased our compliance score from 49 per cent to 75.5 per cent for the first time in history, all credit to the policies of President Bola Ahmed Tinubu.