*The flight operators explain the airlines have collectively agreed to suspend the shutdown to avert further disruption in economic activities in the West African country

*Say ‘we will continue to engage the government and its agencies on way out of this problem’

Isola Moses | ConsumerConnect

In a U-turn, the Nigerian airlines, under the aegis of Airline Operators of Nigeria (AON), have dropped their earlier threat to discontinue flight operations due to a recent increase in the price of aviation fuel, otherwise known as Jet A-1.

ConsumerConnect gathered Mr. Allen Onyema, Vice-President of AON and Chairman of Air Peace, disclosed this in a phone interview with NAN Friday, March 18, 2022, in Lagos.

Earlier, the airline operators had threatened to shut down services Friday, if the Federal Government could not find a lasting solution so the fuel marketers could reduce the price of aviation fuel.

Onyema also explained that the domestic airlines collectively agreed to suspend the shutdown to avert further disruption in economic activities, considering the key role air transportation plays in the logistic mix in the Nigerian economy.

The AON Vice-President further stated: “We are not going to shut down flight operations because discussions are ongoing between us and the relevant players in the oil and gas value chain to find a lasting solution to the problem.

“We are negatively affected by the increasing price of aviation fuel, but as patriotic investors, we will not take any action that will paralyse the economy.”

Onyeama further said: “As patriotic Nigerians and investors, we will continue to engage government and its agencies on the way out of this problem.”

According to the Chairman of Air Peace,  the airlines were considering scaling down on flight frequencies to minimise the cost of operations.

The price hike, he noted, was suffocating for local aviation carriers to continue to operate flights as they spend millions of Naira to fill an aircraft with Jet A-1.

He as well said that indigenous carriers were not considering any further increase in airfares in order to prevent shutting out ordinary Nigerian consumers, who desire to travel by air.

The decision the domestic carriers have taken is a patriotic contribution to President Muhammadu Buhari’s administration, said he.

The AON further said that the current administration is currently utilising every instrument by engaging stakeholders in the oil and gas and air transportation sectors to seek a permanent solution to the price hike.

The Buhari-led administration, Onyeama disclosed had contributed immensely to the development of airlines operations in the country.

He stated: “Since the Buhari administration came on board, it has shown sufficient commitment to improving the aviation industry.

“The President signed an Executive Order that granted waivers on aircraft and its spares and other interventions.”

Onyeama added: “The least we could do is to continue to engage until challenges in the sector are resolved.”

FCCPC, NCAA’s regulatory intervention in AON’s ‘coordinated’ airfare increase

Recall as part of its statutory responsibility to restore a free and undistorted domestic aviation market in Nigeria, the Federal Competition and Consumer Protection Commission (FCCPC) has enjoined members of the Airline Operators of Nigeria (AON) to discontinue their coordinated N50,000 minimum airfare in the country.

ConsumerConnect had reported the regulatory Commission, in conjunction with the Nigerian Civil Aviation Authority (NCAA), has commenced an investigation with respect to this subject capable of distorting operations in the local aviation market.

The regulator stated that AON is “a trade association for domestic airlines under the Federal Competition and Consumer Protection Act, 2018 (FCCPA).”

The Commission noted this measure is pursuant to Sections 17(a),(e),(l),(s),18(3)(a), 107(1)(a), 108, 157 and 158 of the Federal Competition and Consumer Protection Act 2018; Regulation 18.15.2 of the Nigerian Civil Aviation Regulations (Air Transport Economic Regulations) 2015.

Mr. Babatunde Irukera, Executive Vice-Chairman/Chief Executive (EVC/CEO) of FCCPC, said this in a release titled, ‘Interim Statement Regarding Coordinated Increase In Airfares By Certain Scheduled Domestic Airlines Operators’, issued Wednesday, March 2, 2022, in Abuja, FCT.

The regulatory Commission also stated that the FCCPC Sunday, February 20, became aware that domestic airlines purportedly under the aegis of AON, after a series of meetings over a period of three weeks.

Irukera, however, stressed that the Federal Competition and Consumer Protection Act 2018 prohibits “conduct or any coordination between competitors including on the platform of trade associations.”

He said that the Act specifically, 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.”

Coordination in increasing prices (otherwise known as cartel) is an unambiguous infringement of the FCCPA, said he.

The regulator further noted that 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 Commission stated: “The FCCPA, Civil Aviation Act, and implementing regulations of both legislations respect the right and prerogative of airlines (as other businesses) to set their fares independently subject to, and in accordance with prevailing law and applicable processes.”

The FCCPC, however, said that the 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 (NCAA) has commenced an investigation with respect to this subject.