Commission Orders Airlines To Reverse ‘Illegal’ Airfare Hike

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The Federal Competition and Consumer Protection Commission, FCCPC, has ordered airline operators to immediately discontinue the current implementation of airfare increase pending the outcome of its investigation.

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The News Agency of Nigeria, NAN, reports that the Executive Vice Chairman of FCCPC, Babatunde Irukera, said this in a statement on yesterday in Abuja.

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Irukera said the interim order was in line with Sections 17(a), (e), (l), (s), 18(3) (a), 157 and 158 of the FCCP Act.

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He said the commission’s investigations revealed that airline operators in supposedly association meetings discussed multiple industry-wide issues; particularly challenges experienced by their members.

He said credible information revealed that while attendees at the meeting did not arrive at a consensus, the meeting ended in a resolution that encouraged or consented to the coordinated conduct.

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According to him, the FCCPA prohibits conduct or any coordination between competitors including on the platform of trade associations. His words:

“Specifically, Section 107 (1)(a) forbids competitors from fixing prices, while Section 108 prohibits any conspiracy, combination, agreement or arrangement between competitors in any manner that unduly restrains or injures competition.

“Coordination in increasing prices otherwise known as cartel is an unambiguous infringement of the FCCPA.

“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.

“This includes directly or indirectly fixing a charge, fee, rate, fare or tariff and any collusive action.

“The commission in addition to engaging the relevant stakeholders is 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.

“Regarding any increase in air fares and or any conduct not necessarily directly in compliance, but in response to changes in the market on account of compliance by others.”

Irukera enjoined scheduled domestic airline operators to ensure strict and prompt compliance with the interim order pending the outcome of the commission’s investigation.

Domestic airline operators resolved to increase airfares by 100 per cent with effect from March 1.

The resolution adopted by all the domestic operators will peg the least economy ticket at N50,000.

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