A new investigative report by the Nigerian Civil Aviation Authority has found British Airways and Virgin Atlantic Airways guilty of price-fixing on the Nigeria-United Kingdom route.The investigation started six months ago, but the report was submitted to the Ministry of Aviation a few days ago, government said sources.According to the 11-page report, the government has advised the two UK carriers to begin plans towards paying $235m to the Federal Government as compensation.The report, signed by the Director-General, NCAA, Dr. Harold Demuren, and made available to our correspondent on Wednesday, said BA and Virgin took advantage of the duopolistic nature of the Lagos-London market to fix arbitrarily high airfares on the route.Specifically, the panel that conducted the investigation accused BA and Virgin of colluding together and started a conspiracy to fix, periodically increase and maintain Passenger Fuel Surcharge as a component of the fares passengers pay to travel.The report said that the PFS, in the manner it was imposed, increased and maintained, also constituted a device that denied the Federal Government legitimate taxes as the airlines pretended that it was not part of the fare or their revenue, and as such, excluded it from fare calculations for statutory tax purposes.This, the report said, was untrue as the PFS was nothing but an additional fare.The NCAA said its investigation followed a similar one in the UK and the United States, where BAA and Virgin had paid approximately $204m in compensation for the anti-competitive method of setting and conspiring to increase the PFS.The report stated that the government had notified BA and Virgin offices in Nigeria.The report reads in part, After a long painstaking, thorough and comprehensive investigation, spanning approximately half a year, of some conduct by British Airways and Virgin Atlantic Airways , the NCAA has concluded that both airlines violated Nigerian law, exploited Nigerian consumers and have remained adamant about whether those consumers should be compensated even when confronted with the fact that they are already compensating similar consumers in Britain- their home country- and the United States.Pursuant to statutory authority, the NCAA commenced its own investigation and discovered that BA and VAA did in fact collude, and in furtherance of that collusion, periodically increased PFS.BA and VAA operate approximately 90 per cent of the direct flights between Nigeria and the UK, being a duopoly; the effect of this collusion was and continues to be devastating on Nigerian travellers, who have limited choices and have had to and continue to pay indiscriminately high fares.The increases in PFS, the report noted, had no linear correlation with the changing price of crude oil or the cost at which BA and VAA were buying Jet A-1 fuel in Nigeria.It added, Several hundreds of thousands of Nigerians have been victims, including school children, parents taking them to school or going to see them; hard-working Nigerians, companies and their executives; Nigerians who go on holiday abroad, traders, business people and all have been affected at a minimum in the prices paid for goods when air travel is factored as a cost.
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