- Faults FCCPC’S Exploitation Allegation Against Airline
By Kolawole Ojebisi
Air Peace, one of the leading airlines in Nigeria, has explained why a one-hour flight should have cost N700,000 going by the high cost of its operations.
The airline noted that the cost component of a flight ticket determines its price.
Chief Operating Officer (COO) of the airline, Mrs. Oluwatoyin Olajide, made this revelation on Friday while faulting a recent allegation of exploitation of passengers by the Federal Competition and Consumer Protection Commission (FCCPC).
She said the report alleging that the airline was being investigated for exploitative fare was not based on any empirical fact even as she stated that the allegation caused the airline to lose a slot in a foreign country.
Reiterating that the allegation of exploitation in ticket pricing is untrue, Olajide explained that the commission had invited the airline while the Chairman/CEO honoured the invitation where the commission debunked the fact that it is investigating the airline.
But she said the airline was shocked over a news report that the airline was being investigated which gave an impression that Air Peace had committed an offence and that the country was against the airline.
According to her, it is the airline’s operating cost that determines the price of the ticket. She explained that the fuel cost alone constituted 60 to 65 per cent of the operating cost.
On a one-hour flight alone, Olajide stated that the airline consumes aviation fuel known as Jet A1 of N7m.
“Before you say an airline is exploiting passengers, you must be able to prove it. How do you come about that? There are operating costs on a flight. We buy fuel at almost 1,400 per litre. To operate a one hour flight, it will take an average airline 4,000 litres of fuel. Fuel alone costs N7 million on an one hour flight,” she said.
In addition, the ACMI cost, which is the total cost of an Aircraft, Crew, Maintenance, and Insurance (ACMI) lease agreement for some leased aircraft in its fleet, costs $4000 per hour.
“What we pay on insurance is three times higher than what other countries pay. Insurance cost alone brings another N5m on a one-hour flight. Aviation is a high capital industry. This is a highly sensitive sector and you can’t take anything for granted.
Also the cost of borrowing is about 30 % when an American or UK carrier has access to a single-digit loan of about three per cent. These are airlines operating the same kind of aircraft, burning the same amount of fuel. We also have to change the naira to dollars because every single item on a plane, you can’t buy it here,” she explained.
The COO said despite the high cost of operation, the airline still charges between N95,000 and N120,000 to Abuja, adding it would be “terribly unfair” to accuse the airline of exploitative fares.
For an airline in Nigeria to operate sustainably, a one-hour flight should not cost less than N500,000 to N700,000, she stated, adding that airlines in Nigeria are making a huge sacrifice to make air transportation affordable to the people.
Speaking further, the COO disclosed that one of the countries the airline applied to for a slot to operate its summer flights wrote back to Air Peace that they do not have a slot for it, blaming this on the recent negative publication on the invitation by FCCPC.
“A country we have written to for a slot wrote back to us yesterday to say that they don’t have a slot for us because they said we are not their priority.
“They tell us we are not a priority because of the way we are treated in our country. I just hope we can support our own. We are trying our best to put Nigeria on a global map. We need just a little support. Don’t destroy our efforts,” Olajide added.
She recalled that the airline’s entry into the UK stopped the exploitation fares Nigerians were subjected to on the London route, saying air fares were also crashed on many African Countries where the airline now operates to.
The Airline’s Chief commended the President Bola Tinubu’s administration, saying “We are fully aware of the support of the Federal Government. This is not in doubt and we commend it for that.”
