Keyamo Says FCCPC Made ‘Careless’ Statement on Air Peace’s Airfares

Festus Keyamo, minister of Aviation and Aerospace Development, has strongly condemned the Federal Competition and Consumer Protection Commission (FCCPC) for its recent statement regarding Air Peace’s airfares, describing the remarks as “very careless.”

The criticism comes after the FCCPC, on December 1, announced its intention to probe Air Peace over significant price hikes on advance bookings for certain domestic routes.

During an appearance on Arise News’ This Morning show on Sunday, Keyamo expressed his concerns about the FCCPC’s handling of the situation, asserting that the commission should have consulted the Nigeria Civil Aviation Authority (NCAA), the primary regulatory body responsible for overseeing the airline sector, before making such a public statement.

“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,” Keyamo remarked.

“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.”

Keyamo emphasised that the FCCPC should have reached out to the NCAA for a proper review of the situation.

“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,” he continued.

“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.”

The minister also pointed to the larger challenges plaguing Nigeria’s aviation industry, specifically the limited capacity of airlines to acquire aircraft and service domestic routes effectively.

Keyamo noted that the real issue facing Nigerian airlines goes beyond the maintenance of existing aircraft and lies in the complexities of leasing new ones, a situation compounded by the volatility of the foreign exchange market.

“Nigeria’s own is even in a more precarious position because it is not about maintaining the aircraft alone, but in terms of renting the aircraft itself, which is what they call ACMI (Aircraft, Crew, Maintenance, and Insurance),” Keyamo explained.

“An ACMI contract, also known as wet or damp leasing, is an agreement between two airlines, where the lessor provides an aircraft, crew, maintenance, and insurance to the lessee in return for payment based on the number of block hours operated.”

According to Keyamo, most Nigerian airlines operate on ACMI contracts, which are priced in foreign currencies, making them susceptible to fluctuations in exchange rates.

“When you take them on lease, you take them with the aircraft, the crew, insurance, and everything, all of these are in foreign exchange,” the minister said.

“With the fluctuating nature of our Naira against the dollar, you expect that it will affect their cost of operation.”

To address these financial pressures, Keyamo explained that the government is actively working to improve the conditions for Nigerian airlines, particularly by exposing them to international markets where they can access better terms for leasing aircraft.

“What we are therefore doing is ensuring that we expose them to the market across the world, where they can now assess aircraft on very good terms. This will impact the prices of tickets and their cost of operation,” he noted.

The minister further clarified that these efforts are aligned with broader initiatives to address the sector’s challenges, particularly the application of the Cape Town Convention.

“That is what led us to addressing the issue of the practice direction pursuant to the Cape Town Convention,” he stated. “That is the core of the problem of the aviation industry, and this president and the vice president graciously supported us to get to.”

Keyamo’s remarks according to stakeholders highlights the complexities facing the Nigerian aviation industry and the importance of a coordinated and informed approach to regulation and policy-making.

Before Keyamo’s comments, the FCCPC had expressed deep concern over recent comments by Air Peace, which it believed were part of a strategy to obscure the ongoing investigation into potential consumer rights violations, including exploitative ticket pricing.

Last Thursday, the Commission refuted a misleading media report that misrepresented a meeting between FCCPC officials and the Air Peace team on December 3, at the Commission’s Abuja headquarters.

The meeting, which was part of a larger investigation following numerous passenger complaints, was intended to address these concerns in a confidential manner.