In a statement on Wednesday, Babatunde Irukera, executive
vice-chairman of FCCPC, said the order would remain in place pending the
outcome of its investigation into the matter.
Nigerian airlines had recently increased the cost of economy
flight tickets for domestic routes from about N35,000 to a base fare of
N50,000.
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”.
It reminded the airlines that the FCCPA Act 2018 prohibits
conduct or any coordination between competitors including on the platform of trade
associations.
“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,” the statement reads.
The commission added that coordination in increasing prices
(otherwise known as a cartel) is an unambiguous infringement of the FCCPA.
It further stated 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”.
According to him, 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.
He, however, said the “prevailing law expressly prohibits
coordination, agreement or cooperation between competitors in setting fares”.
He said the commission and the Nigerian Civil Aviation
Authority (NCAA) had commenced investigations into the matter.
He said that although the investigation is at early stages,
there is sufficient probable cause to proceed and also provide interim measures
to restore a free and undistorted domestic aviation market.
“In the circumstances, the Commission is in addition to
engaging the relevant stakeholders 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 of the AON or its members 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 compliance by others,” the
statement adds.
“The Commission enjoins scheduled domestic airline operators to ensure strict and prompt compliance with the Interim Order pending the outcome of the commission’s investigation.”
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