Festus Keyamo, minister of aviation and aerospace
development, has criticised a recent statement by the Federal Competition and
Consumer Protection Commission (FCCPC) on Air Peace’s airfares, describing it
as “very careless”.
On December 1, the FCCPC announced it would investigate Air
Peace over consumer complaints of exploitative practices.
FCCPC said it will probe Air Peace over significant price
hikes for advance bookings on certain domestic routes.
On Friday, Oluwatoyin Olajide, Air Peace’s chief operating
officer, described the FCCPC’s allegations of exploitative fares as damaging
and unfair.
Speaking during an interview on ‘This Morning’ show on Arise
News on Sunday, Keyamo said the commission should have consulted the Nigeria
Civil Aviation Authority (NCAA), the core agency responsible for regulation,
before making such comments.
“I think it was a very careless statement — I say that with
all apologies — by the agency, without even consulting the core agency involved
in regulation, which is the NCAA,” he said.
“The powers to regulate for the airline to inform about
their price increase and all that is domiciled in NCAA, that is the core
agency.
“We cannot have an agency of government floating all over
the place, having all the powers, that means if there’s a problem with yam
pricing they will go and call the agricultural minister.
“I don’t think their powers are stretched to that point, but
I say that with apologies because also I’m a minister of government.
“They should have contacted the NCAA for them to look at the
figures and the books which we have been doing, so we would have given them
facts, but to single out a few airlines while we are struggling to expose them
to the world for them to get more enhanced capacity was a bit careless.”
‘LIMITED CAPACITY TO
ACQUIRE AIRCRAFT, FX AFFECTING AIRLINES’
Keyamo said the main issue affecting the aviation sector is
the limited capacity of airlines to acquire aircraft and service their routes,
compounded by the impact of foreign exchange (FX) on operations.
“Nigeria’s own is even a more precarious position because it
is not about maintaining the aircraft alone, but in terms of rent hiring the
aircraft itself which is what they call ACMI,” he said.
ACMI stands for aircraft, crew, maintenance and insurance.
An ACIM contract also known as wet or damp leasing, is an
agreement between two airlines, where the lessor agrees to provide an aircraft,
crew, maintenance and insurance (ACMI) to the lessee – in return for payment on
the number of block hours operated.
Keyamo said most of the airline operators operate on ACMI,
“which is what they call the wet leases, wet leases which are also foreign
exchange based, because you have to service your obligations under those ACMIs,
that is when you take aircraft on lease”.
“When you take them on lease, you take them with the
aircraft, the crew, insurance and everything, all of these are foreign
exchanges,” the minister said.
“With the fluctuating nature of our Naira against the
dollar, you expect that it will affect their cost of operation.
“What we are therefore doing is to ensure that we expose
them to the market across the world where they can now assess aircrafts on very
good terms and this will impact on the prices of tickets and their cost of
operation.
“That is what led us to addressing the issue of the practice
direction pursuant to the Cape Town Convention that is the core of the problem
of the aviation industry that this president and the vice president graciously
supported us to get to.”
The federal government officially signed the Cape Town
Convention (CTC) practice direction to enable domestic airline operators to
access aircraft on dry lease on September 12.
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