Reduce fares or quit, Reps tell British Airways

APRIL 3, 2012 BY JOHN AMEH, ABUJA 

The House of Representatives Committee on Aviation has directed the British Airways to either reduce its ticket prices on the lucrative Lagos-London route or consider shutting its operations in Nigeria.

“Our people are suffering and they are complaining. Reduce your fares or quit; it is either you tell us that you will reduce them or you quit”, Chairman of the House committee, Mrs. Nkiruka Onyejeocha, told the BA’s Country General Manager, Mr. Kola Olayinka, in Abuja on Monday.

The committee had summoned foreign airline operators to address the issue of high fares charged and alleged maltreatment of Nigerian passengers.

The committee said that Nigerians could no longer bear the high fares charged by international airlines operating in the country, particularly BA, which is said to be the most patronised.

Besides the high and “unbearable fares”, the committee also observed that Nigerians were subjected to shabby treatment by the airlines compared to the situation in other countries in the sub-region where they offered better services.

Ghana was used as an example by the committee.

According to the committee, a first class ticket on the Lagos-London-Lagos route is $9,325 while Accra-London-Accra is $5,085, showing a fare differential of $4,239 paid by Nigerians on the same distance.

It noted that while a business ticket on the Lagos-London route was $4,092, it was $3,036 on Accra-London, with a difference of $1,055 paid by Nigerians.

The premium economy class also attracts a difference of $92.02 between what is paid in Nigeria and what is paid in Ghana.

However, BA’s economy class is $987 in Nigeria, while it is $1,220 in Ghana.

At the commencement of the session with the foreign airlines, Olayinka claimed that “EU Anti-Trust Laws” prevent an airline operator from discussing prices and strategies at any meeting where other operators are also in attendance.

“This issue can lead one to jail; all the airlines are aware of this. It is difficult and almost impossible to discuss pricing in the presence of other airlines”, the BA boss told the committee.

His response led to angry comments from some members of the committee.

Onyejeocha asked him whether the anti-trust laws were superior to the laws of Nigeria.

Olayinka replied that he would talk when other operators were sent out of the hall.

The panel obliged his request to be heard alone by asking the other operators to leave the hall.

Olayinka however still declined to give a direct response to a question on whether BA would consider reducing its fares in Nigeria.

He chose to rather submit that “the competition and the environment” were the factors that determined BA’s fares.

When asked how the factors he enumerated were better in Ghana than in Nigeria, which is described as “the busiest route for BA”, he did not give a clear response.

Olayinka, however, told the committee that any possibility of fare reduction depended on the outcome of the inter-governmental discussions going on between the Nigerian Ministry of Aviation and the British Department of Transport.

“This meeting is already going on and will hopefully be concluded in June. The two countries are talking; it may lead to a review of fares,” he stated.

Olayinka claimed that the fact that BA made more money in Nigeria than it did in Ghana “does not mean that prices will tumble.”

He told the committee that BA had no serious competition on the route, as there were fewer airlines.

The Director-General of the Nigerian Civil Aviation Authority, Mr. Harold Damuren, informed the committee that BA was frequently in violation of regulations.
“One of the issues we have battled with them is passenger fuel surcharge. This is not excusable because this is not taxed”, he said.

Damuren said that BA’s total surcharges amounted to $524, which was borne by Nigerian travellers.

He said the NCAA was conducting a holistic investigation into the matter and would have to compel all airlines to comply with rules and regulations of the industry. Meanwhile, the National Association of Travel Agents said that in 2011 alone, foreign airlines sold tickets worth over $1bn in Nigeria.

Its President, Mr. Aminu Agoha, informed the committee that “hidden charges” accounted for 50 per cent of the ticket prices.

He said most of the airlines offered deceptive fares on their websites and promos just to lure Nigerians.

“These so-called cheaper fares are there for the sake of being there”, he added.

He also accused the airlines of refusal to pay commissions to the travel agents “because they feel that we are not important.”

“They treat us the way they feel. There are over 600 registered travel agencies in Nigeria with a workforce of 5,000 people. But, the airlines, all their employees put together are not more than 250,” he added.

He lamented that foreign airlines deliberately introduced measures to frustrate travel agencies.

SOURCE: The Punch, 3 April 2012. http://www.punchng.com/