According to the Federal Competition and Consumer Protection Commission (FCCPC), Air Peace has been invited to participate in a simple investigation to learn more about its pricing strategy and address customer concerns.
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According to Mrs. Boladale Adeyinka, Director of Surveillance and Investigation, the Commission urged Air Peace to inform its consumers about its pricing strategy in response to customer concerns, but neither the airline nor its chairman, Dr. Allen Onyema, are the subject of any investigations. “We sincerely appreciate you accepting our invitation in person.
We now have a better understanding of your business. Please remember that this is an inquiry to better understand and learn more based on customer complaints, not an investigation. Adeyinka praised Air Peace for the insights gained into its operations at a Tuesday meeting in Abuja, where Dr. Allen Onyema, the chairman of Air Peace, led a few members of his team to honour the invitation given to the airline.
“Thank you also for contributing your knowledge and perspectives to the industry; it benefits both Nigerian consumers and us. If customers are claiming that this is our plane, it indicates that ownership has shifted from you to all Nigerians, thus we are glad you are doing well. She emphasised that corporate stability and sustainability are key to the Commission’s purpose and stated that it exists for the benefit of companies, consumers, and operators.
As part of the Commission’s efforts to increase market competition, “we will review the situation and intervene where we can, not just for Air Peace customers but generally for all air passengers and other consumers of aviation services,” the statement continued. In addition, the director of the FCCPC praised Dr. Onyema’s patriotism and generosity and counselled him to keep serving humanity no matter what. Earlier, Dr. Onyema, the chairman of Air Peace, said that airfare pricing in the aviation industry is a global phenomenon, but he bemoaned the fact that Nigeria’s ticket regime is out of proportion to the cost of launching an aircraft, which is why Nigerian airlines regularly fail.
According to Dr. Onyema, Nigerians would have to decide whether to fly safely and sustainably, which calls for appropriate price based on international standards, or watch as the airlines fail as a result of low pricing. “Nigeria needs flight safety.” At Air Peace, safety is not only a concern but also a prerequisite. Due to Nigerians’ limited purchasing power, he said that the cost of flying anywhere in the globe is between $250 and $300 per hour, and in some situations, as much as $540.
He added that this might be considered fair pricing, which Air Peace does not adhere to. Dr. Onyema maintained that he has remained in the aviation industry due to the addictive nature of the industry and his sense of patriotism, emphasising that few Nigerians could afford to fly if Air Peace were to factor in the various fees associated with its operations.
He claimed that the high interest rates on bank loans, which range from 33 to 35 percent, the high cost of insurance, which is estimated to be around $12 million a year and could cover roughly eight aircraft overseas, the fluctuating cost of aviation fuel, other incidentals, and part replacement, all of which are sourced in dollars, all contribute to the exorbitant cost of tickets.
The chairman of Air Peace further noted that the cost of landing an Airbus aircraft costs approximately $4,000 per hour, similar to the cost of an engine flight circle per hour. He emphasised that these expenses, if included in operational costs, will prevent many Nigerians from having the chance to travel. “Things are much better overseas, but things are different here. Even though 70% is considered the breakeven mark because the tickets are not just right, you will still not break even when you fill your jet with passengers after you have calculated all these expenses.
He added that in other countries, operating expenses make up 40% of the business, but he lamented that in Nigeria, the situation is different because operating expenses sometimes reach 70%. Dr. Onyema emphasised that nothing will destroy his sense of patriotism, saying that he has served Nigeria well in times of need, helping to preserve the nation’s reputation during COVID-19 and other times when certain Nigerians were trapped overseas at no expense to the government.
