FG not investigating Air Peace – FCCPC

The Federal Competition and Consumer Protection Commission (FCCPC) says its invitation to Air Peace is for an inquiry to understand its price methodology and respond to consumers complaints.

Boladale Adeyinka, the Director, Surveillance and Investigation, said neither the airline nor Allen Onyema, the chairman, is under any investigation, but that the Commission invited Air Peace based on complaints from customers for the airline to educate them on its price methodology.

“Thank you so much for honouring our invite in person. We have gained more insight into your operations. Just again to reiterate that it is not an investigation, it is an enquiry to understand and again, find out based on consumer complaints.”

Adeyinka, who stated this on Tuesday in Abuja when the chairman of Air Peace, D Allen Onyema led some members of his team to honour the invite extended to the airline, commended Air Peace for the insights made on its operations.

“Thank you also for bringing your expertise and insights to the industry, it is a good one for us, it is a good one for Nigerian consumers. This is our own, we are happy that you are doing well because if the consumers are saying that this is our aircraft, it means that ownership has moved from you to every Nigerian.”

She noted that the Commission exists for the good of businesses, customers and the operators, stressing that business stability and sustainability are core to their mandate.

“We will review the situation and intervene where we can, not just for Air Peace customers but generally for all air passengers and other consumers of aviation services,” adding that this is part of the Commission’s efforts at bringing competitiveness in the market.

The FCCPC director also commended Dr. Onyema for his love for the country and philanthropic spirit and advised him not to let anything deter him from his services to humanity.

Earlier Onyema, the Chairman of Air Peace, explained that fare pricing in the aviation sector is a global thing but lamented that the fare regime in Nigeria is not commensurate to the cost of putting an aircraft in the air, thus the reason why airlines frequently go under in Nigeria.

Onyema argued that the choice before Nigerians going forward would be flying safe and sustainability of the airlines, which requires proper pricing based on global standards or watch the airlines go under due to poor pricing.

Read also: FG investigates Air Peace, GT bank, MTN over exploratitive pricing

“We need flight safety in Nigeria. For us at Air Peace, safety is a pre-condition rather than just a priority.”

He pointed out that the cost of flying anywhere in the world is priced at between $250 to $300 for an hour and in some cases even as high as $540, adding that this is what could pass for fair pricing, which Air Peace does not follow because of the low purchasing power of Nigerians.

Onyema argued that the addictive nature of aviation business and patriotism have kept him in the business, stressing that if Air Peace is to factor the numerous charges involved in its operational cost, not many Nigerians would afford to fly.

He stated that the high cost of interest on loans from banks ranging from 33 to 35 percent, high insurance cost put at about $12m annually, an amount which could insure about eight aircraft abroad, volatility in the cost of aviation fuel, other sundry charges and replacement of parts, which are all sourced in dollars, make prices of tickets very high.

The Chairman of Air Peace also pointed out that it costs about $4,000 for landing per hour for an airbus plane, just as there is a cost for engine flight circle per hour, stressing that these costs if factored into operating cost will deny a number of Nigerians the opportunity of flying.

“What happens abroad is far better but here, it is a different ball game. When you calculate all these costs, you will find out that when you fill your plane with passengers, you will still have not broken even, though 70 percent is given as the breakeven point because the fares are not just right.”

He further highlighted that in other climes the cost of operations accounts for 40 percent component of the business but regretted that the case is different in Nigeria as the cost is much higher even up to 70 percent.

Dr Onyema noted that he has served Nigeria well at critical times in helping to protect the image of the country during COVID-19, and other times when some Nigerians were stranded abroad at no cost to the nation, stressing that nothing will kill the patriotic spirit in him.