Air Peace Escalates Allegation of Exploitative Fares to Presidency, Decries FCCPC’s Actions

Air Peace has reported the allegation of exploitative fares by the Federal Competition and Consumer Protection Commission (FCCPC) to the Presidency in response to the commission’s insistence that it is investigating it over unfair pricing of its tickets.

The airline also alleges that it lost a summer slot in another country to the damage occasioned by FCCPC allegation, which has damaged its image in the aviation community.

The Chief Operating Officer of the airline, Mrs. Oluwatoyin Olajide, made this known during a press conference held in Lagos on Friday in reaction to s a statement issued on Thursday by the commission, insisting that it was investigating Air Peace and alleged that any contrary report was sponsored, as the airline had earlier stated that FCCPC wrote to it indicating it was making enquiry over the allegation of selling exploitative ticket by air travellers.

During the press conference, the Air Peace Chief Operating Officer said the airline management was disappointed over FCCPC’s recent actions and has had to escalate the issue to the Presidency.

She wondered what criteria the FCCPC used to determine that Air Peace is charging exploitative fares, considering the cost of operations in Nigeria’s aviation sector.

“Before you say an airline is exploiting passengers, you must be able to prove it. How do you come about that? Airlines spend so much money to put an aircraft in the air. We buy fuel at almost N1,400 per litre. To operate one hour flight, it will take mid-sized aircraft 4,000 litres of fuel, which comes to N7 million on a one hour flight. Many of the aircraft we use are leased on ACMI (aircraft, crew, maintenance and insurance) and the cost of operating an aircraft under this arrangement is $4, 000 for one hour, which is equivalent to N7 million in today’s exchange rate. That brings the cost to N14 million. What Nigerian airlines pay for aircraft is three to four times what airlines in Europe or US pay because Nigeria is stigmatised as a high risk country and it is the airlines that operate in Nigeria that bear that brunt. So, the cost of insurance for one hour flight is about N5 million. Add this to the other costs for one hour flight.

“We also have to look at the funding. In airline business, you cannot afford to take anything for granted because human lives are involved.

“We pay interest rate of about 30 per cent to borrow money in Nigeria but airlines in UK and US pay only two per cent. You have to take cognisance of the fact that we operate the same aircraft types, Boeing, Airbus, Embraer with the same fuel consumption. In Nigeria, we have to change naira to buy dollars. We pay dollars to bring in everything, including aircraft and spares. After we have paid all these operating costs, we undercharge passengers from N95, 000 to N150,000 for tickets and we are being crucified,” Olajide said.

She stressed that airlines in Nigeria are not making profits because of high operating costs, adding that if airlines really want to be profitable, they should be charging N500,000 to N700,000 for a one hour flight. But this is not even possible because many Nigerians cannot afford it.

Olajide emphasised that President Bola Ahmed Tinubu has been very supportive of Air Peace and wondered why a government agency has decided to do damage to the airline.

Meanwhile, Air Peace has alleged that it just lost a slot in another country as a result of the current issue it is having with the Federal Competition and Consumer Protection Commission.

Mrs. Olajide said that one of the countries it has been applying to for summer slots wrote to the airline, saying that Nigeria is not its priority and alleged that the negative response to the airline’s request was not unconnected to its current imbroglio with the commission.

“A country we have written to for slot wrote back to us yesterday to say that they don’t have slot for us because they said we are not their priority. They tell us we are not priority because of the way we are treated in our country. I just hope we can support our own. We are trying our best to put Nigeria on a global map. We need just little support. Don’t destroy our efforts,” Olajide said.

She said when people read reports suggesting that a country is against its own airline, they will begin to treat the airline with disregard and stressed that the federal government is not against indigenous investments but supports businesses, adding that FCCPC does not understand the magnitude of damage they have done to Nigeria.

“We cannot allow this same airline that has rescued us to be pulled down. Today, we have other African carriers that come to Nigeria and are charging very high fares to those destinations Air Peace does not fly to. Other countries are begging us to come to their country because they know that if we start operating to their country, the fare in that destination will crash. What we are charging today is still below what our counterparts overseas with better conditions are charging,” Olajide said.

She also wondered what criteria the FCCPC used to determine that Air Peace is charging exploitative fares, considering the cost of operations in Nigeria’s aviation industry and recognising that there is no benchmark set up by government against which it could considered that an airline is charging exploitative fares, noting that any time one goes to the sites of domestic airlines, Air Peace may not be the one charging the highest fares; so, she did not know why Air Peace was singled out.

Chinedu Eze

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