FG Begins Probe of Airlines Over Alleged Collusion to Fix Airfares

The Federal Government has commenced investigations into the alleged collusion by domestic airlines to fix airfares on all domestic routes.

Price-fixing is a practice whereby rival companies come to an illicit agreement not to sell goods or services below a certain price.

It was gathered on Tuesday that efforts were currently ongoing to unravel reasons for the sudden hike in airfares by all domestic carriers, as the airlines, aside from  Green Africa Airways, raised the airfare for a one-hour flight in economy class to as high as N50,000.

This indicated a jump of over 60 per cent, considering the fact that airfares for such tickets were between N26,000 and N30,000 few weeks ago.

An email sighted on Tuesday, which was allegedly sent by a domestic carrier to its travel agents, stated that all airlines had effected same increase in airfares.

Industry observers argued that the email and other indications suggested that the airfare hike was an unanimous decision by domestic carriers to engage in price-fixing.

The email read in part, “This is to update you that effective today, February 18, 2022, the airline’s ticket fares have been reviewed with the least fare at N50.000 only across all our routes.

This has become necessary in view of the current hike in prices of aviation related materials, services, and exchange rate.

“It is worth noting that all other airlines have also effected same fare increase. We crave your understanding and support to sell our stated fares.”

Reacting to the development, the Executive Vice-Chairman/Chief Executive Officer of the Federal Competition and Consumer Protection Commission, Babatunde Irukera, said the FCCPC was aware of the latest concern in the aviation sector.

He told our correspondent that the commission had commenced investigations into the issues raised by both passengers and other concerned observers in the aviation sector.

He said, “We’ve been engaging the Nigerian Civil Aviation Authority on that. Firstly, it is against the law for competitors to coordinate and come together to discuss or agree on price. That is forming a cartel.

“But an announcement in itself will not be sufficient evidence of the cartel. You need to investigate and discover if there is such cartel. Now the articles we’ve read seem to suggest that they agreed as an airline association. But we haven’t seen an evidence of that.

“And because cartel is criminal and will involve monetary penalties, it requires evidence to clear every doubt. So we need to find the evidence if that’s what happened, for instance, one airline has said to us, ‘no, we were never part of any announcement’.”

February 24, 2022