Keyamo: FCCPC’s Statement on Air Peace Pricing Methodology Careless, Should Have Contacted NCAA

Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, has said that the statement by the Federal Competition and Consumer Protection Commission (FCCPC) which questioned Nigerian airline Air Peace’s pricing methodology was careless.

Keyamo said the agency should have contacted the Nigeria Civil Aviation Authority (NCAA) directly instead of going public.

This follows an invitation by the FCCPC which was honoured by the airline’s executives last week, to address allegations of price gouging and poor service delivery.

However, Keyamo, in an interview with ARISE NEWS on Sunday, addressed the issue, saying, “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 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 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.

Keyamo then revealed that in January, he will be leading 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 of the fact that all these efforts we have made to make them access these markets around the world, has increased our compliance score from 49% to 75.5% for the first time in history, all credit to the policies of President Bola Ahmed Tinubu. 

“Our global score has gone up for the first time in the history of Nigeria. And because of that, they want to now listen to us. They want to listen to our operators as to how they can now access aircraft at very cheap rates. And this will impact eventually, all the process of tickets.

“So, that is why I said it was a careless statement that they made, singling out airlines to say they’re exploiting prices and all that, without even coming to us to say what is the core of this problem?”

The Minister then reaffirmed that while protecting consumers is a priority, the survival of local airlines remains paramount. 

He said, “I’m in a very delicate position because I’m also here to protect Nigerians. I’m also here to protect the travellers and to ensure that they also get tickets at a very good rate. And that is what I have also addressed in terms of what we are eventually doing to address the problems and the concerns of Nigerians. But I must also say that I must stand in the gap to ensure that our local airlines do not go under. In the last 40 years, more than 100 airlines have come and gone. The mortality rate is so high that assignation minister, this is the only government addressing their problem among our five point’s agenda for the first time. 

“Like I said in history, we are saying we put survival of local airlines as one of our KPIs. The policy shift is that other governments have said, look, you have no capacity, ye cannot even help you or your other foreign airlines come and take over our national carriers and help us. That is a wrong policy approach. But this policy shift is that we must enhance their capacity, and that is what we are doing.

“So that I think is the direction I think we are going. It’s a clear direction. We apologise, we beg Nigerians to be patient on this, but we are addressing this frontally together with the airlines and together with global issues that will enhance their capacities at the end of the day.”

Ozioma Samuel-Ugwuezi

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