The federal government has ordered  domestic airlines to reverse the hike in air fares. 

Specifically, through its executive vice-chairman Babatunde Irukera in a statement on Wednesday, the Federal Competition and Consumer Protection Commission (FCCPC) said coordination in increasing prices (or a cartel) is an unambiguous infringement of the FCCPA.

“The FCCPA prohibits conduct or any coordination between competitors including on the platform of trade associations,” Mr Irukera stressed.  

The commission maintained that the actions carried out by the Airline Operators of Nigeria (AON) amounted to price-fixing, adding that detailed investigations revealed the airlines’ move to be “coordinated.”

The commission cited its 2018 Act, reiterating that the current legislation prohibits conduct or any coordination between competitors, including on the platform of trade associations.

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

In February, Nigerian airlines hiked the cost of economy flight tickets for domestic routes to base fare of N50,000. The airline operators cited high costs of jet A1 fuel, forex scarcity, double-digit inflation, increase in ground handling charges, cost of buying and importing spare parts as reasons for the increment.

The tickets of major carriers like Air Peace, Ibom Air, Max Air, Aero Contractors, Dana, and Azman immediately reflected the change in base fare to a minimum of N50,000.

Due to economic hardship across the country, airlines have faced low load factors, with many seats not occupied by passengers. Since airlines have high fixed costs associated with each flight, a low load factor could translate to lower profit or total loss for the airline.