Aviation Expert Dismisses Airlines' Fare Hike Justifications as Untenable
In a detailed interview, Chris Aligbe, Managing Director of Belujane Konzult, addressed the controversy surrounding alleged price-fixing by indigenous carriers in Nigeria. The Federal Competition and Consumer Protection Commission (FCCPC) has leveled accusations of anti-competition practices against these airlines, prompting scrutiny from both the FCCPC and the Nigeria Civil Aviation Authority (NCAA). Aligbe emphasized the need for sanctions to prevent future occurrences and protect consumers.
Questioning the Fare Increase Rationale
The spike in airfares during December became a significant issue, disrupting travel plans during the festive period. Stakeholders and the flying public voiced complaints, as the price hike appeared unjustifiable. Airlines cited multiple taxation and high Jet A1 costs, but Aligbe argued these reasons were not tenable. He noted that there was no increase in Jet A1 prices and no new taxes introduced at the time, a fact confirmed by the NCAA. This led many to view the fare increases as exploitative.
Following complaints, the FCCPC investigated and, in its interim findings, identified evidence of anti-competition, including price collusion. The commission is working with forensic analysts and is expected to release a final report. However, some critics argue that the FCCPC lacks the competence and power to intervene in aviation matters, suggesting the NCAA should handle it exclusively. Aligbe countered this by highlighting fundamental ignorance about regulatory roles.
Clarifying Regulatory Authorities
Aligbe explained that the NCAA is a sector-specific regulator with powers derived from the NCAA Act, which includes making laws and regulations for managing the aviation sector. Parts 18 and 19 of the regulations, introduced in 2012, cover Economic Regulations and Consumer Protection, respectively. He noted that the NCAA draws from the International Civil Aviation Organisation (ICAO), which has its own regulations on anti-competition and consumer protection. Once domesticated, ICAO agreements assume the same status as municipal law, similar to the FCCPC Act.
He pointed out that there are about 15 sector-specific regulators in Nigeria, such as the Central Bank of Nigeria (CBN) and Nigerian Communication Commission (NCC), each with authority in their respective fields. The FCCPC, established under an Act of the National Assembly, is an omnibus regulator covering the entire economy, including consumer protection issues across all sectors. Aligbe referenced recent statements by the Chief Justice of the Federation, who described the FCCPC as a game-changer in the Nigerian economy, affirming its powers.
Examples of FCCPC's interventions include closing Sahad stores in Abuja, fining DSTV, and imposing a $300 million fine on a communication company. Aligbe stressed that while sector-specific regulators like the NCAA cannot operate outside their industry, the FCCPC has an overall right to oversee consumer protection-related issues. He dismissed suggestions to transfer the NCAA's economic regulation schedule to the FCCPC, arguing that sector-specific details are best handled by specialized bodies to avoid over-regulation.
Addressing Criticisms and Knowledge Gaps
When asked if the FCCPC's intervention suggests over-regulation, Aligbe asserted it is necessary to prevent recurrence of exploitative practices. Sanctions, such as refunding exploited passengers, would deter airlines from repeating such actions. He acknowledged that enforcement has been lacking but emphasized that the FCCPC only steps in when necessary, particularly in cases of disputes or regulatory gaps.
Critics have also claimed the FCCPC lacks aviation expertise, but Aligbe refuted this as completely incorrect. He noted that Dr. Babatunde Irukera, who drafted Parts 18 and 19 of the aviation regulations, also drafted the FCCPC Act and served as its Chief Executive Officer. Additionally, Adamu Abdullahi, a former acting head of FCCPC, previously served as Director of Consumer Protection at the NCAA. The current leadership under Tunji Bello brings vast administrative and legal experience, and the FCCPC has invested heavily in staff training across sectors.
Regarding the NCAA's role, Part 18 of the Nigerian Civil Aviation Regulations (NCARs) 2022 requires airlines to inform the NCAA of any price adjustments. Aligbe suggested there is a knowledge gap in the NCAA's economic regulation capabilities, rather than incompetence. He explained that Parts 18 and 19 focused more on consumer protection than economic regulation, which involves complex issues like travel agencies and ticket sales. The NCAA has recognized this gap and is taking steps to address it, such as inviting ICAO for workshops.
Rejecting Airlines' Excuses
Aligbe dismissed airlines' claims that aircraft unavailability affected their ability to open booking portals early, leading to fare hikes. He argued that airlines should plan for peak travel periods well in advance and that delaying bookings to create artificial scarcity is not a valid excuse. Similarly, he rejected the notion of one-way traffic during peak periods as a reason for price spikes, stating that no destination in Nigeria is truly one-way, as passengers will return. High fares likely discourage return travel, making this claim an attempt to justify exploitative pricing.
Recommendations for Prevention
To prevent a recurrence, Aligbe emphasized the importance of sanctions. Airlines found guilty should refund affected passengers, a practice followed by regulators like the Federal Aviation Administration (FAA) and the UK Civil Aviation Authority (CAA). Without sanctions, such practices will continue. He called for cooperation between regulators, with the NCAA handling sector-specific issues and the FCCPC providing oversight where necessary. Ultimately, both institutions must work together to ensure fairness and protect consumers in the aviation sector.
