DISCRIMINATORY FARES: THE EXCLUSION AND ACCOMPANING APOLOGY

(this article was written feb 2007)

Having watched the passion and the agility exhibited by the Honourable Minister of State for Aviation, Chief Femi Fani-Kayode, in setting new standards for the industry and putting in motion the process of reversing the present greedy appetite of the foreign airlines and the tag-along attitude of Virgin Nigeria on issues bordering on ticket fares and services provided to Nigerians on international routes.

The Honourable Minister has raised the issues of high fares, discourteous services to Nigerian travellers in particular & Nigeria in general. Also he raised the issue of aircraft fumigation when passengers are seated.

I would like to address the issue of fares in this write-up, having noticed the passion and interest the issue has recently generated in the media, the most popular international route in Nigeria is the Lagos -London route which is being used as a barometer for judging fares out of Nigeria. It is important to state here that neither the Honourable Minister nor Government can legislate on fares into Nigeria. Also due to Anti-trust laws in Europe and other Western countries, airlines are barred from discussing or fixing fares, which attracts severe sanctions when violated. Here in Nigeria, the war on high fares should have been spearheaded by the Nigerian Civil Aviation Authority (NCAA), which hitherto did not have the bite or the teeth to take on these mega carriers, but has now been granted autonomy.
Highlighted below are some reasons adduced so far for the high fares on the international routes:
• Lack of travel/holiday plans by Nigerians
• Poor attitude towards booking flight early enough to benefit from low fares
• High incidence of NO-SHOW on travel days
• High cost of operating flights in and out of Nigerian airspace
• General cost of doing business in Nigeria is high when compared to neighbouring countries
• Capacity and frequencies provided on the international routes are low.
• Nine percent agency commission due to travel agents
• Non participation of domestic carriers
• Lack of a national carrier
• Lack of political will by Ministry officials
• Lack of autonomy for Nigerian Civil Aviation Authority

Presently, the international routes are dominated by foreign airlines with an excess of $240 billion accruing from flights into the country for the year 2006 from about $50 billion in 1999, with little or no reciprocity from Nigerian airline. Four airlines fly directly to London from Nigeria. They are British Airways, Virgin Atlantic, Virgin Nigeria and Belleview Nigeria, which is a ratio of 2.5 to 1.5 in favour of the British. Other airlines fly through their respective countries using the Sixth Freedom Right (right of an airline to carry passenger/traffic between two foreign countries through the airline’s home country).

That in essence makes the capacity available low when compared to the size of the travelling population, which has inadvertently reflected in fares. Domestic airlines are financially weak and unable to provide requisite equipment that can compete with foreign airlines. Also, over the years the Ministry of Aviation has placed more emphasis on commercial agreements (CA) to the detriment of bilateral air services agreements (BASA). The CA’s seems more profitable to Ministry officials as a certain amount is paid per passenger. Unfortunately that cost is passed to Nigerian travellers, which leads to discriminatory fares.

The first class and business class fares in Nigeria are still regulated but the economy fares are deregulated due to persistent complaints of foreign airline who claim the cost of doing business in Nigeria is too high. The regulatory authorities acceded to this request with a proviso that the foreign airlines must file fares and tariffs periodically for the authorities to asses the viability or otherwise of the amount charged. This has not been done by most airlines.

Charter and tour operators are not encouraged on the Lagos-London route due to bottlenecks encountered at the Ministry when applying for requisite approval papers; they are forced to block seats on flights further reducing capacity. It is therefore cheaper to fly from London to Nairobi and Johannesburg, eight (8) and ten (10) hour flights respectively, than to Lagos which is below six (6) hours. The fare from London to Nairobi is $728, Johannesburg $838 and Lagos $869.

How do we reverse this trend? From the above it is clear that we need more capacities and frequencies on international routes to ginger competition that will eventually drive down fares. It is pertinent to state here that fares on the London-New York route which is the same distance but cheaper than Lagos –London route were forced down by competition and the business class fare went the same way due to the presence of Air India on that route using the fifth freedom right (which is the right of an airline to take on and let down passengers between two foreign countries), which also applies on the Australia –USA route with Emirates’ utilization of the Fifth Freedom on that route to the benefit of air travellers.furthermore,the cheapest fares to Johannesburg from Lagos is on Belleview Nigeria using the fifth freedom rights from Douala,Cameroun to Johannesburg, South Africa. This is also known as the Jupiter effect- for increasing activity.

It is important to let Nigerians know that the cheapest scheduled flights to London from Lagos are flights operated under the Sixth Freedom Right such as Afriqiyah Airways, Belleview, Sierra Leone, Iberia and Egypt Air.

Our government needs to decide who should be protected - domestic airlines or Nigerian travellers. If it is the Nigerian travellers are more important, then government should consider the following:
• Using the Fifth Freedom Right on the international routes to shore up capacity. This can be part of our unused bilateral air services agreement.
• Supporting domestic carriers by providing access to funds internationally.
• Expediting the consolidation process of domestic carriers and designating more carriers to fly internationally.
• Encouraging charter and tour operators by reducing the protocol and problems encountered when seeking permits from the Ministry of Aviation. It should be known that the cheapest fares during the high season (traffic) are those of charter and tour operators.
• Autonomy of NCAA should not only be heard, but be seen and felt by Nigerians.

Finally, the political will of the Ministry of Transport (Aviation), usually driven by the Honourable Minister must be professional, patriotic and Nigeria centred.
Recent actions of the Honourable Minister have overtly or covertly contributed to the exclusion of Nigeria from countries whose citizens will pay British Airways £120 per bag if in excess of the recently introduced 23kg allowed for check –in and the advertised apology of Virgin Atlantic for delays on their network on, Thursday 15th February and Sunday18th February 2007, the airline went further to promise compensation, for those having delay letters given at the airport.

Do I need to repeat the power of people and principled centred government?
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