Federal Competition and Consumer Protection Commission, FCCPC has condemned the recent hike in flight fares by domestic airlines under the aegis of the Airline Operators of Nigeria, AON. The Chief Executive Officer of the Commission, Babatunde Irukera made this known in a statement, saying the Airline Operators of Nigeria had held series of meetings over a period of three weeks to discuss multiple industry-wide issues; particularly challenges experienced by its members.
According to him, “the commission’s preliminary investigation discloses the meeting dates of AON to have been on or about February 8, February 17 and February 23, 2022. “The investigation also confirms that one of the items of discussion during at least one of those meetings was to set base or minimum air fares.” Mr Irukera stated that from the Commission’s understanding there was an initial lack of consensus with respect to coordinated conduct resulting in setting air fares. “Specifically, Air Peace, Azman Air and United Nigeria Airlines immediately proceeded with the increase. Arik followed.” he stated.
“However, on Friday, February 18, 2022 at 6:31 p.m. Aero Contractors informed its trade partners (travel agents) and its commercial executive team by email that ticket fares were reviewed effective February 18, 2022 with the least fare being N50,000 across all routes”. He noted that the Federal Competition and Consumer Protection Act, FCCPA prohibits conduct or any coordination between competitors including on the platform of trade associations.
Mr Irukera stated that, section 107 (1)(a) forbids competitors from fixing prices, and section 108 prohibits any conspiracy, combination, agreement or arrangement between competitors in any manner that unduly restrains or injures competition”. “Further, the current and prevailing Nigerian Civil Aviation Regulations (Air Transport Economic Regulations) in Regulation 18.15.2 (i) and (iii) expressly prohibits airlines from engaging in any contract, arrangement, understanding, conspiracy or combination in restraint of competition which includes directly or indirectly fixing a charge, fee, rate, fare or tariff and any collusive action” The FCCPC boss stated.
Meanwhile, the Chief Executive Officer of the commission explained that the FCCPA, Civil Aviation Act and implementing regulations of both legislations respect the right and prerogative of airlines to set their fares independently, subject to, and in accordance with prevailing law and applicable processes. “Prevailing law expressly prohibits coordination, agreement or cooperation between competitors in setting fares, as such, the Commission with the collaboration of the Nigerian Civil Aviation Authority has commenced an investigation with respect to this subject” he said.
Mr Irukera called on scheduled domestic airline operators to ensure strict and prompt compliance with the interim order pending outcome of the Commission’s investigation.