Aviation stakeholders split over FCCPC price fixing report

Stakeholders in Nigeria’s aviation industry are divided over allegations that domestic airlines engaged in price fixing during the last festive season, following an investigation by the Federal Competition and Consumer Protection Commission (FCCPC).

The Commission indicted five unnamed domestic carriers in its report, a development that has sparked sustained debate across the sector. The airlines, operating under the umbrella of the Airline Operators of Nigeria (AON), have rejected the findings, arguing that the FCCPC lacks the technical expertise to interpret airline economics and warning that such conclusions could threaten the survival of domestic carriers.

However, the Managing Director of Belujane Konzult, Chris Aligbe, defended the Commission’s intervention, insisting that the FCCPC acted within its statutory mandate to check anti-competitive practices across all industries.

Aligbe noted that while the Nigeria Civil Aviation Authority (NCAA) regulates safety and technical operations in aviation, the FCCPC has broader powers to address competition and consumer protection matters. He argued that the sharp rise in ticket prices during the festive period could not be adequately justified by airlines and that regulatory oversight was necessary to prevent passenger exploitation.

“The FCCPC is an omnibus regulator,” Aligbe said. “Irrespective of sector-specific regulators, they cannot go outside their industry because they are sector-specific. The FCCPC has an overall right and can override if the chips are faced, if the thing comes to the fore.”

He dismissed claims of regulatory duplication, adding: “For those who have said it is a duplication of duties and that the issue should be transferred to the NCAA, I say it is wrong. For the simple fact that there are things in each sector, the details that the FCCPC may not know.”

Aligbe further accused some airlines of exploiting peak travel periods by restricting early bookings and creating artificial demand pressure, which he said forced passengers to purchase tickets at inflated prices. He warned that without strict enforcement and sanctions, such practices would persist, noting that regulators in other jurisdictions have compelled airlines to refund passengers in similar circumstances.

On the other side of the divide, a retired pilot, Muhammed Badamosi, backed the position of the airline operators, stressing that carriers have the right to determine fares based on prevailing economic realities. He noted that rising operational costs across the industry justified price adjustments and urged critics to consider the financial pressures faced by airlines.

“The operators have the right to act and speak on what concerns them, and it is in the process that they can give the reasons as to why they have increased airfares,” Badamosi said. “I do not know why somebody will tell them that they do not have the right to increase or act on what concerns them; it is business and it must be treated as such.

“We all know the way things are skyrocketing in the market now. Why should anyone then decide to enforce a price on them without knowing how they got to that point or what they have invested into their business? Nobody wants to run out of business.”

He added that airlines must be reasonable in their pricing, cautioning that increases beyond what passengers can afford could ultimately backfire.

A retired Group Captain, John Ojukutu, offered a different perspective, suggesting that the FCCPC may not be properly empowered to question airline pricing without collaboration with the NCAA or a thorough understanding of airline operational costs.

“The FCCPC will not have the power to appropriately wade into airlines’ pricing issues because the laws have stipulations about how airlines arrive at their pricing, which is approved by the NCAA,” Ojukutu said. “It is there in Part 18 of the regulations.

“So, it is either the FCCPC is able to check Jet A1 prices, ground handling costs, and other operational costs and investments done by the airline; until then, the FCCPC may not have what it requires to do the job accurately as it concerns airfare prices.”

As the debate continues, industry observers note that the outcome of the standoff could have significant implications for pricing regulation, consumer protection, and the financial viability of domestic airlines in Nigeria.