At the centre of the controversy is the issue of transparency in pricing and allegations of market dominance by certain airlines, particularly on high-demand routes. The FCCPC has accused some operators of opaque pricing practices, hidden charges, and even abuse of dominance on specific routes—especially during festive periods. The airlines, however, insist that high operational costs and persistently elevated interest rates are the primary drivers of rising airfares.
The debate unfolded during a webinar titled “Aviation Town Hall: High Air Fares – Are Airlines Really the Problem?” organised by Avaero Capital Partners and aviation expert Alex Nwuba.
FCCPC Raises Concerns Over Opaque Pricing and Market Dominance
Speaking at the virtual event, FCCPC’s Executive Commissioner (Operations), represented by Director of Corporate Affairs Ondaje Ijagwu, said the commission was investigating allegations of price-fixing in the aviation sector.
Ijagwu said:
“We also have an active investigation ongoing, but we won’t be speaking so much to some of these issues in detail. We are told that a number of factors occasioned that rise (Yuletide fares). One of the reasons we were given for the December rise was the fact that there was multiple taxation, and airlines said a whole lot was being paid to the government.
“When we talk about the behaviour of air fares and airline operations in Nigeria, the behaviour of airline operators is already quite implicated. The reason is that, even when you want to book a flight, you will find the information opaque.
“If you book your flight, particularly for clients who are outside our immediate environment, you would see that a whole lot of things are listed as part of the charges. If you pay a tax when you obtain a ticket, you will see it clearly stated there. If there are other charges, you will also see them and the base fare clearly stated, so whoever is making this purchase will know these are the various components.
“But in a situation where there is asymmetry of information, consumers definitely will begin to ask questions as to why fares are rising. The interface between consumers and flying is with airline operators; the government does not interface directly with consumers in that respect. Whoever will be taking the hit will definitely be the operator himself.”
The commission also raised concerns over airlines allegedly exploiting their dominant position on certain routes—especially during festive seasons when demand spikes.
“We have a situation where we have dominant players, and they abuse to some extent, allegedly anyway. From what we gather from consumers, it seems there is abuse of the dominant player’s position,” Ijagwu added.
He explained that dominance can be route-specific, such as on routes to the South-East, where consumers may have limited alternatives and are therefore more vulnerable to price hikes.
Airlines Argue High Costs, Not Profit, Are Driving Prices
The AON, however, insisted that the primary reason for high airfares lies in the high cost of operation and financing in Nigeria.
AON spokesperson Professor Obiora Okonkwo said:
“The cost of operation that applies in Nigeria is similar to the cost of operation that applies in other parts of the world, which are jet fuel and maintenance, among others. If you have your aircraft maintained per cycles or per calendar, these are strictly OEM-driven.
“There is no maintenance system that is designed for Nigerian operators. These things remain constant and are very expensive. We still maintain that the cost of airfare in Nigeria is mainly due to operational costs, multiple charges, and high interest rates.
“So far, operational costs remain high, interest rates remain high, and the fare in Nigeria will continue to be higher. However, we fly comparatively few people, as do most parts of the world. I still think that even for what we go through, and because we are very sensitive to the cost of living in Nigeria, we do as much as possible to reduce and not go overboard with the air fares.”
Industry Stakeholders Cite Forex, Interest Rates, and Infrastructure
Adding to the conversation, the Chief Executive Officer of Omni-Blu Aviation Ltd, Engr Akin Olateru, said that the trend of high airfares during Christmas and New Year is not unique to Nigeria.
He said:
“Airfares during Christmas and New Year are always a big deal anywhere in the world. It is not just down to the airlines. Even hotels are more expensive during Christmas and the New Year. Why are airfares expensive in Nigeria? Airlines in Nigeria face two major problems. One is forex. Also, interest rates are high.
“There is no business set up as a charity; we need to work on this interest rate. Now, the importation of spare parts. I don’t know if people have noticed, but most scheduled operators in Nigeria today have one aircraft packed and use it as a spare. There is also the issue of airport infrastructure, which affects aircraft utilisation. Aircraft cost is still there. It’s still part of the cost for the operator.”
What This Means for Passengers
The ongoing disagreement between the FCCPC and airlines underscores the complexity of Nigeria’s aviation market. While the commission focuses on consumer protection and fair competition, the airlines argue that macroeconomic realities and infrastructure challenges are the major cost drivers.
As the FCCPC continues its investigation into pricing practices, consumers are left watching closely to see whether any regulatory action will be taken—and whether it will translate into more affordable fares on domestic routes.