By John Ikani
The Federal Competition and Consumer Protection Commission (FCCPC) has ordered domestic airline operators to immediately discontinue the current implementation of airfare hike pending the outcome of its investigation.
Recall that airline operators have pegged the least economy ticket at N50,000, citing increase in price of Jet A1, rising exchange rate and other factors.
A statement on Wednesday in Abuja by Babatunde Irukera, Executive Vice Chairman/Chief Executive of FCCPC, said the increase in airfares is an unambiguous infringement of the Federal Competition and Consumer Protection Act, 2018 and Regulation 18.15.2 of the Nigerian Civil Aviation Regulations (Air Transport Economic Regulations), 2015.
The FCCPC attributed the action of the carriers under the aegis of the Airline Operators of Nigeria (AON) to price-fixing, saying detailed investigations by the commission showed that the airlines’ move was “coordinated”.
The investigation which is carried out by FCCPC in conjunction with the Nigerian Civil Aviation Authority (NCAA), is to tackle consumer-related issues which include high airfares, insensitive flight delays and cancellations and others, in the aviation sector.
What the investigations revealed so far
Irukera said that the commission’s investigations revealed that airline operators in supposedly association meetings discussed multiple industry-wide issues; particularly challenges experienced by their members.
He said that credible information revealed that while attendees who engaged in mutual discussions at the meeting, did not arrive at an initial consensus, the meeting ended in a resolution that encouraged or consented to the coordinated conduct despite significant controversy.
The FCCPC boss pointed out that the FCCPA prohibits conduct or any coordination between competitors including on the platform of trade associations.
• He stated, ”Specifically, Section 107 (1)(a) forbids competitors from fixing prices, while 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.
• ”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.
• ”This includes directly or indirectly fixing a charge, fee, rate, fare or tariff and any collusive action.
• ”The commission in addition to engaging the relevant stakeholders is entering and dispatching interim orders under Sections 17(a),(e),(l),(s),18(3)(a), 157 and 158 of the FCCPA.
• ”Prohibiting the performance or continuation of any agreement or arrangement associated with, or resulting from discussions, deliberations, debates, argument or resolutions of/at any meeting.
• ”Regarding any increase in airfares and or any conduct not necessarily directly in compliance, but in response to changes in the market on account of a compliance by others.’’
Irukera enjoined scheduled domestic airline operators to ensure strict and prompt compliance with the interim order pending the outcome of the commission’s investigation
