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Foreign airlines and fares disparity

Published by Guardian on Thu, 05 Apr 2012


WITH threats and counter-threats by Nigeria and Britain over violation of aviation laws, the simmering crisis between foreign airlines ' British carriers in particular ' and Nigeria over fares disparity for equidistant flights to Europe in the West African sub region may boil over. It may also in effect, harm bilateral air services agreements and trade relationships.At a time the dispute is running parallel to another row over airport landing slots at London's Heathrow airport involving a Nigerian carrier, Arik Air, the onus is on the Federal Government to insist on a comprehensive justification of the unreasonable fares disparity and move to protect the travelling public from further exploitation. That of course is without prejudice to any meaningful dialogue between the contending parties.In the interim, Aviation Minister, Stella Oduah, who on March 27 gave a 30-day ultimatum to British Airways (BA) and Virgin Atlantic to restore parity in fares charged passengers on Lagos-London and Abuja-London routes with that of Accra-London or risk a ban by Nigeria, should remain focused and worry less about unwarranted intimidation from the airlines or their home governments. Any foreign airline involved in the rip-off of Nigerian passengers must for instance be made to explain its discriminatory pricing policy. Any action that would restore fairer and equitable treatment of the Nigerian travelling public must be pursued.In addition, there is need for a presidential directive to ensure that any official, no matter the status, with a ticket bought with public funds must henceforth fly Nigerian airlines to Europe or other destination serviced by them. From all indication, the current fares charged on equidistant routes within the region to Europe are not only inexplicable but also exploitative and provocative.Under the present controversial regime, Europe-bound Nigerian travellers from the Lagos and Abuja airports are subjected to almost double the fares from Accra in Ghana by same carriers for the same six-hour flights. BA for instance charges $10,070 for a First Class return seat from Abuja to London while the same facility through Accra costs $4,943. On the same flight, a Premium Economy ticket goes for $3,208 while Economy costs $2,840. Comparatively, on the Accra-London route, a Premium Economy seat sells for $2,420; Economy ($2,156).Virgin Atlantic's Premium Economy and Economy rates on the Lagos-London route are $4,173 and $2,956 while Accra-London passengers pay much lower ' $1,826 and $1,563 for the same tickets.Other airlines are no less culpable. On Lufthansa, the Abuja-Frankfurt Economy ticket is $3,661 (Accra-Frankfurt $1,330). An Economy ticket on KLM from Abuja-Amsterdam costs $4,502 (Accra-Amsterdam $1,181). Alitalia charges $863 for an Accra-Rome Economy seat while a Lagos-Rome equivalent is $1,509. These are samples.Incidentally, outside Nigeria's business environment, about $625 is charged from London-New York (U.S); London-Dallas $787 and London-Florida $730 for a nine-hour flight! Where then is the economy of scale in the application of the rates'Aviation minister Oduah had accused the foreign airlines of using delay tactics to address the huge differentials having given them a December 2011 timeline to respond to queries following initial complaints last year. Fighting back, BA argued that as an airline with over 75 years flight experience to Nigeria, its charges were 'fully legally compliant' with the BASA between the United Kingdom and Nigeria. Besides, BA says all fares are 'set on sound commercial basis' competitive fares, a choice of products and connections.It is unfortunate that British officials, in responding to the questionable pricing policy of the country's carriers, said it would take 'retaliatory steps' against Nigerian airlines on the ban, because such steps would be a 'heavy handed action that will be catastrophic'. It sounds puerile to argue further that only Business and First Class fares were more expensive (than neighbouring countries') 'because of high demand for those seats'. If that is the case, when has it become a crime for citizens of a country to be prosperous'However, claims by the foreign airlines of higher taxes and surcharges at the airports should be investigated and immediately addressed, based on other international charges. If the local rates are too high, government should justifiably have a second look at them. For instance, on a typical Lagos-London-Lagos ticket of $2,464, the taxes amount to $316.4, including FAAN ($50), NCAA 5 per cent charge ($123.2), Security ($20), PSC ($50) and VAT 5 per cent ($123.2). In Accra, a passenger is reported to be paying a total of $60.Rationally, a government collecting higher taxes on tickets and other services than are obtainable elsewhere would not be on any high moral ground to ask for reduction in fares since a substantial part of the rates returns to the government. The same 'high' tax regimes also apply to domestic routes.Monitoring is an essential issue in governance. It is indefensible that under the watch of the Federal Government, the country loses about N3.7 billion yearly to violations of Nigeria's aviation laws by foreign airlines. It is even unpardonable that aviation regulatory agencies allegedly collude with the foreign carriers to hike fares, hence the failure to check excesses. In addition, claims that some officials of the aviation agencies are induced by free tickets on the foreign airlines deserve to be investigated.There may be need to overhaul the sector. The Senate's intervention ordering a committee to report in three weeks all issues relating to compliance is welcome (it will be just in time for the minister to take a firm position); same for the consideration of a Passengers Bill of Rights from the ministry to guarantee fairer deals for passengers.In the absence of a credible national carrier, government can provide incentives that would encourage more private participation in the industry, as well as for the current operators. The incentives can further encourage private citizens to fly Nigerian-registered carriers. Nigerians have a choice, yes. But many Nigerians too have had enough of mental slavery to everything foreign.
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