The Minister of Aviation and Aerospace Development, Festus Keyamo, has criticized the Federal Competition and Consumer Protection Commission (FCCPC) for its recent public statement questioning Air Peace’s pricing practices. According to Keyamo, the FCCPC should have first consulted with the Nigerian Civil Aviation Authority (NCAA), the primary regulator of airline pricing, before making any public remarks.
Speaking during an interview on The Morning Show on Arise News TV on Sunday, Keyamo addressed the FCCPC’s investigation into allegations of exorbitant airfares charged by Air Peace. He emphasized that the NCAA is the authority responsible for regulating airline pricing and accused the FCCPC of bypassing due process in its public critique of the airline.
“I think it was a very careless statement—I say that with all apology—by the agency, making such a statement without consulting the core agency involved in regulation, which is the NCAA,” Keyamo said.
He further stated, “They should have contacted the NCAA for them to look at the books, which we have been doing, so we would have given them the facts.”
Challenges Facing Nigerian Airlines
Addressing the broader issue of airline pricing, the Minister explained that Nigerian airlines, including Air Peace, face significant operational challenges unrelated to price gouging. He highlighted factors such as limited capacity, difficulties in acquiring and maintaining aircraft, and the impact of fluctuating foreign exchange rates on operational costs.
Keyamo also pointed out that many airlines in Nigeria rely on wet leasing aircraft—a practice that involves leasing aircraft along with crew, maintenance, and insurance—which increases operational expenses.
Context of FCCPC Investigation
The FCCPC recently launched an investigation into Air Peace, along with GTBank and MTN, over consumer complaints. In the case of Air Peace, the focus is on alleged exploitative pricing.
The airline’s Chief Operating Officer, Oluwatoyin Olajide, defended the fares, citing rising operational costs as justification. She highlighted that a one-hour flight costs the airline approximately N7 million in fuel expenses and $4,000 in aircraft leasing fees.
Ongoing Reforms in Aviation
Efforts to address the challenges faced by Nigerian airlines are ongoing. In October 2024, Nigeria enhanced its compliance with the Cape Town Convention, a move aimed at improving leasing conditions for local airlines. Additionally, Keyamo is set to lead a delegation to Dublin in January 2025 to negotiate better aircraft leasing terms, a step expected to reduce operational costs and eventually lower ticket prices for consumers.
However, a significant obstacle remains the insurance requirement imposed by the National Insurance Commission (NAICOM). Current regulations mandate local coverage for all risks, while international lessors typically require foreign-based insurance for dry-lease agreements. Discussions are underway to ease these restrictions, which would allow local airlines to access more affordable leasing options.
Looking Ahead
Keyamo reiterated the need for collaboration between regulatory agencies like the FCCPC and the NCAA to ensure accurate assessments of the aviation sector. He also emphasized the government’s commitment to addressing systemic challenges to make air travel more affordable and sustainable for Nigerians.
