Dailyreport
War between Keyamo and the FCCPC over Air Peace
Festus Keyamo, the Minister of Aviation and Aerospace Development, and the Federal Competition and Consumer Protection Commission (FCCPC) are at odds regarding Air Peace’s purported encouragement of other airlines to raise fares.War between Keyamo and the FCCPC over Air Peace
The FCCPC issued a warning to Air Peace over the weekend to avoid detracting from the ongoing inquiry into its pricing. The warning stated that the airline had been accused of inciting other domestic carriers to increase fares, among other things.
It also stated that certain petitioners had accused Air Peace of cancelling flights arbitrarily without providing passengers with compensation for the cancelled flights.
Inadequate assertion
However, Keyamo responded to the agency’s statement in an interview with ARISE NEWS yesterday, stating, “I believe it was a very careless statement – I say that with all apology – by the agency, as they made such a statement without consulting the core agency involved in regulation, which is the NCAA.”
“The NCAA is the central agency responsible for regulating these airlines and issuing notifications regarding price increases.”
“They should have contacted the NCAA to review the books, as we have been doing, so we could have provided them with the necessary information. However, it was somewhat negligent to identify a few airlines that we are currently encountering difficulty in promoting to the global market in order to increase their capacity.
“The issue we are currently confronting is the airlines’ capacity to acquire aircraft and service their routes. The issue of the fluctuation of the forex, or exchange rate, is once again beyond our control and has a significant impact on all aspects of aviation. The aviation industry is entirely based on the dollar.
Reports surfaced a week ago that the FCCPC had initiated an inquiry into the widespread consumer complaints against Air Peace in order to address concerns regarding poor service delivery, exploitative practices, and potential violations of consumer rights.
Another report emerged following a meeting between the FCCPC and Air Peace in Abuja, which confirmed that the agency was indeed investigating Air Peace. Reports claiming otherwise were categorically denied.
However, Olajide contended that the fares charged by Nigerian airlines were not proportional to the cost of operations during a news conference in Lagos on Friday. He enquired as to the criteria that were employed to make the decision.
Rebuttal
In a statement titled “Consumer Rights Violation: FCCPC cautions Air Peace against obstructing inquiry,” Ondaje Ijagwu, Director of Corporate Affairs at the FCCPC, emphasised that the issues brought before the commission were serious and that the commission must investigate them.
Ijagwu expressed his concern regarding the most recent statement made by Air Peace, which appears to be part of a series of manoeuvres designed to both obscure the issues and divert the commission from the ongoing investigation into alleged exploitative ticket pricing, as well as other potential violations of consumers’ rights.
“Last Thursday, the commission was required to refute a report that was syndicated in a section of the media. The report grossly misrepresented the proceedings at a meeting between its officials and the Air Peace team that took place at the commission’s Abuja headquarters earlier on December 3. This was in response to an avalanche of petitions received from passengers in recent times.”
“The FCCPC elected to conduct the December 3 session in camera as a gesture of good faith to maintain confidentiality, despite the fact that Section 33 of the Federal Competition and Consumer Protection Act, FCCPA, 2018 grants the commission discretionary authority to conduct enquiries in public or in camera.”
Breach
“However, the session was abruptly concluded by the media’s publication of leaks that attributed unfounded but prejudicial statements to the commission’s officials. These leaks categorically declared that “Air Peace was not under investigation” and frequently quoted the Air Peace Chairman, Dr. Allen Onyema, in an act of self-aggrandizement.” It is curious that the same media leaks failed to include a boastful statement made by Mr. Onyema at the same December 3 engagement that he could decide to shut down the airline, ostensibly to demonstrate that he was doing the nation a favour by flying.
“The commission reiterated in its December 5 statement that the inquiry was still ongoing and advised the public to be cautious of manufactured news, as the report was not disseminated on the commission’s official communication platforms.
In a dramatic turn of events on Friday, Air Peace held a press conference in Lagos. During the conference, the organisation made a number of outrageous claims and innuendos that were clearly intended to incite emotions. However, it conveniently avoided addressing the actual issues.
Weak comprehension
“For example, Air Peace’s assertion that the aviation regulatory agency is the sole entity capable of conducting enquiries into its operations is indicative of a profound lack of comprehension regarding the legal and moral foundations of its operational environment. Its services are consumed by passengers. The FCCPA guarantees their inalienable rights. It serves as the foundation for FCCPC’s intervention.
“The FCCPC is required to conduct enquiries that are deemed necessary or desirable in connection with any matter falling within the purview of the Act, as stipulated in Section 17(e) of the FCCPA 2018.”Moreover, Section 127(1)(a) grants the FCCPC the authority to guarantee that pricing practices in all sectors, including aviation, are equitable, competitive, and non-exploitative. It specifically 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.
In accordance with Section 148(3)(c) of the FCCPA 2018, the FCCPC has the authority to instruct an inspector to initiate an inquiry and investigate the matter as expeditiously as possible to ascertain whether the undertaking has violated the Act’s provisions.
“The investigation into Air Peace’s pricing practices is based on allegations of unjustified fare increases on advance bookings for specific domestic routes, a lack of transparency in pricing structures, and practices that may violate consumer rights and fair competition principles.”
“Even more alarming was the statement made by Air Peace during the press conference that the optimal fare for a one-hour domestic flight in Nigeria should be between N500,000 and N700,000.” It asserted that it allocates an average of N7m to fuel an aircraft for a one-hour flight. However, certain petitions submitted by consumers to the Commission strongly refute these assertions. The argument is that the Boeing 737-500 that is typically operated by Air Peace requires N4m to fill a 4,500-liter Jet A1 tank. A Boeing 737-500 vessel with a full load of 120 passengers earns a staggering N24m when a one-hour flight is sold at the current average of N200,000. The “most ideal fare” proposed by Air Peace is N500,000. This would result in a Boeing 737-500 fetching a staggering N60m per one-hour service.
“It is intriguing that, at the same time that Air Peace is proposing a fare of N500,000, another airline has reduced the fare to N80,000 on not only the one-hour Abuja-Lagos flight but also on other domestic routes. This proves that operational sustainability and affordability can coexist in the same operating environment.” The recent singular action by a competitor has prompted some petitioners to enquire whether the fuel that Air Peace utilises is being imported from the United States at a higher cost.
Complaints
In other petitions to the commission, Air Peace is blamed for getting other airlines, which, ironically, have much smaller fleets than Air Peace, to raise prices in the local aviation industry.
“Some petitioners have also said that Air Peace cancels flights for no reason and doesn’t care about or compensate passengers.” On Friday, November 29, almost two weeks ago, angry Air Peace passengers went on the rampage in the domestic terminal of Nnamdi Azikiwe International Airport at 10 p.m. after the Abuja-Lagos service was more than four hours late, putting public safety at risk. That night, it took the work of a group of security agents to get things back to normal at the country’s main international gateway.
“Passengers have also said that they were asked and forced to pay a 50% surcharge when they wanted to use their tickets on another day after going through a lot of trouble with flight delays or cancellations earlier.”
“These are some of the important issues that the commission is looking into to make sure that Nigerian passengers are not taken advantage of by price gouging and fixing prices.”
Tax evasion
So there is no doubt, let it be known that the commission will not be stopped by threats of violence or other shady behaviour as it continues to carefully look into the claims against Air Peace in order to take the right legal action as required by the FCCPA.
“The commission wants to reassure the public that it will continue to do what it is supposed to do under Section 104 of the FCCPA. This part of the law makes it the main law in Nigeria for protecting consumers and competition.” The Commission is dedicated to protecting consumer rights, promoting market fairness, and creating a competitive and clear market in all areas, including aviation.
