NCAA denies authorising raise in fares by airlines

*Air fares, charges product of deregulated market

*Carriers rethink strategy

The Nigerian Civil Aviation Authority (NCAA) said it did not authorise airlines to increase air fares, just as the aviation regulatory body said air fares, add-ons, charges, tariffs and terms and condition of service are fully liberalised.

According to spokesman for NCAA, Sam Adurogboye, air fares and sundry charges have been statutorily deregulated and subjected to market forces.

While foreign airlines had raised air fares on popular routes by over 70 per cent, domestic airlines are cut in the web of following suite following the decreasing purchasing power of many and the downturn in the country’s economy.

The high cost of air tickets on international routes was caused by twin problems of devaluation of the Naira and summer when airlines take advantage of the volume of traffic owing to demand that far outweighs supply.

The devaluation of Naira which has affected cost of operations and high cost of maintenance is forcing the carriers to tinker with the idea of raising air fares.

But not a few said the decision could be suicidal for the airlines that are barely having their airplanes full, as many passengers are now taking to road transportation to save cost.

The tough or harsh operating environment they have found themselves has forced them to

reshape their business model to remain in business. Some of them are looking at ‘unprofitable’ routes or reduction in frequency to remain afloat.

However, the aviation regulatory body noted that all air carriers or its agent are expected to file with the authority a tariff for that service showing all rates, fares and add-on charges, including the terms and conditions of free and reduced rate transportation for that service, as specified in IS.18.14.1.1.

Other requirement for air fare raise is for the carriers to obtain approval from the NCAA to introduce and or increase add-on charges or surcharges such as fuel, internet booking, insurance, security and similar surcharges, prior to implementation.

It would be recalled that section 18.14.1.2. of the Nigerian Civil Aviation Regulations (Nig.CARs) says all tariffs are required to be filed of 18.14.1.1 and shall be done at least seven days before the rates come into effect, except in the case of matching an existing rate for which no prior notification is required.

After the conditions must have been met, the NCAA would therefore approve the fares accordingly.

Adurogboye further explained that prior to the approval, all fares filed with the authority are subjected to breakeven analysis, adding that it is a continuous process.

He said that the analysis is to curb anti-competitive pricing and to ensure that fares are not too low as to impact on safety arising from inability to carry out prerequisite maintenance on their aircraft.

“On the other hand, NCAA will similarly intervene if the fares are too high to avoid overpricing that will deny the teeming passengers access to air transportation.”

“However, in 18.14.1.4, If an air carrier that offers a service fails to apply the fares,rates, charges or terms and conditions of carriage set out in the tariff that applies to that service, the authority may direct it to take the corrective measures it considers appropriate; and pay compensation for any expense incurred by a person adversely affected by its failure to apply the fares, rates, charges or terms and conditions set out in the tariff.”

The NCAA has therefore advised all airline operators and stakeholders to discountenance the reports and continue to operate on the atmosphere of liberalisation and level playing field the Federal Government of Nigeria has put in place.

Wole Shadare