Following an investigation by the Federal Competition and Consumer Protection Commission (FCCPC) that uncovered evidence of price manipulation by some domestic airlines during the Yuletide season, the Airline Operators of Nigeria (AON) has expressed concerns about the agency’s interference in ticket pricing, claiming it harms the survival of local operators.
AON dismissed the findings of the FCCPC’s probe, asserting that the commission lacks an understanding of airline economics and is not equipped with the professional expertise to dictate how airlines set their prices.
FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, issued a statement after the investigation, which was carried out by the commission’s Department of Surveillance and Investigations. The probe, based on pricing data from domestic airlines, showed that airfares during the festive season were significantly higher across various routes, despite relative stability in major cost factors like aviation fuel prices, government charges, and foreign exchange rates.
The statement read:
“The discrepancies observed in fares appear to reflect arbitrary pricing decisions by airlines, including yield management and capacity allocation, rather than variations in regulatory fees. Route-level analysis indicates that higher fares were linked to reduced seat availability during predictable seasonal demand peaks. On certain high-density routes, peak fares were closely aligned across multiple operators.”
In response to FCCPC’s preliminary analysis, AON spokesperson Professor Obiora Okonkwo stated:
“I haven’t reviewed the details of the report, but what FCCPC is doing is highly damaging to the survival of domestic airlines. They lack knowledge of airline economics and the expertise required to determine pricing. They don’t understand airline operations. As far as AON is concerned, their statements are nothing more than grandstanding and should not be taken seriously. We respect all government agencies, but we won’t accept claims that aren’t grounded in reality or facts.”
During the Yuletide period, some domestic airlines raised ticket prices on certain routes, particularly those in the South-East and South-South regions, by over 131%. For example, a one-way economy ticket from Lagos to Asaba, Delta State, surged from N147,000 to N337,500. Similarly, one-way economy tickets from Lagos to Enugu and Benin (Edo State) jumped from N145,000 to N335,500, while fares from Abuja to Benin also rose to N335,500.
Okonkwo had previously dismissed the price-fixing claims, explaining that higher demand for flights during the season necessitated the price increases. He elaborated:
“In aviation, there’s a formula for determining fares. There are different ticket classes—low, middle, and high. There could be up to six classes. Ultimately, we aim for yield management. We calculate it based on the total revenue and divide it by the number of available seats, even accounting for vacant seats. For example, if a ticket is sold for N400,000, we might have sold another seat for N150,000. We have to manage seat sales and costs to break even while ensuring we can service the aircraft.”
He further added:
“We buy aircraft and spare parts from the same global market as international airlines. We pay pilots the same rates, even when they are Nigerian. The cost of operations in Nigeria is higher, and all these factors contribute to the pricing structure.”
