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By Chinelo Obogo, [email protected]
The past few weeks can be said to be very challenging for the aviation industry as airlines faced fresh criticisms from the public over flight delays and cancellations. Things got a head when the Chairman, Senate Committee on Aviation, Smart Adeyemi, at a Joint Committee oversight function in Lagos, said the National Assembly would consider a bill that wouldpermit foreign airlines to do domestic operations if local flight disruption persists.
In responding to the lawmaker, the Airline Operators of Nigeria (AON) did a 16-point rebuttal blaming aviation fuel scarcity, forex, lack of adequate infrastructure among other reasons for flight disruption.
Shortly afterwards, airlines increased their fares to a minimum of N50, 000 as cost of operations rose.
But Nigerian travel agents association is displeased with the airlines, accusing them of breaking anti-competition law by pegging air fares at a minimum of N50, 000 (airlines deny this). At a press parley in Lagos, President of the National Association of Nigeria Travel Agencies (NANTA), Susan Akporiaye, said it is an unfair business practice to put a peg on air fare because it puts the customer in a difficult situation where there are no options.
Akporiaye, who would be standing for re-election at NANTA’s Annual General Meeting holding in Kano, also said it has become very crucial for the Federal Government to put structures in place to protect the aviation downstream sector, revealing that local travel agents are losing businesses to foreign agents due to the failure of the government to protect local content.
Why I am seeking re-election
Before my election, I promised a more united NANTA irrespective of the zone and my team would bear me witness that that has happened because we have visited all the zones and the eastern zone that has always been very quiet throughout the years are now coming out forcefully.
As we speak, they have the highest number of people registered for the AGM and this was a zone that you never used to hear about in the past.
I also promised members to open up doors of opportunity for more income to be generated by our members instead of just selling tickets and now we have able to get the approval of the Emir of Kano to make NANTA the official promoters of the Durbar festival. In this year’s AGM, we would be having a pre-event mini Durbar Festival on March 23 at the palace of the Emir of Kano. This is the first time that we are having this and the essence is to do a test run since we would be handling the bigger one.
We also signed a partnership with the Egypt Embassy to give NANTA the mandate to process tourist visas which would give our members more oppourtunity to sell travel packages. We have a checklist given to us by the Egyptian Embassy and we are working directly with them. For our members that have tourists that want to travel, they just want us to help out because there has been reports of applications being delayed, so it is the ambassador’s way of ensuring the problem is solved.
The idea is that we do the checks and by the time it gets to the embassy, they just send it straight to immigration in Cairo.
Also, why the embassy gave us that mandate is because a lot of people travel to Egypt and refuse to come back because it is a very easy path to connect to Europe, so this has made them more stringent in the way they process visas.
I promised four things and I have delivered on all of them and that is the reason I am seeking re-election.
Aviation fuel scarcity
Business challenges are endless, so we need to have the right attitude that this too would pass. We had the forex crisis in 2018 which was so bad that the airlines were only selling full fares and people could hardly travel because of the cost. That challenge came and passed. I see the aviation fuel crisis as a challenge that will come and pass. It will definitely affect us because tickets now cost a minimum of N50, 000 and because of how bad our roads are, travelling by road is not an option for many people.
There is a circular from the government, telling airlines to review the ticket prices downwards because they are breaking an anti-competition law.
You cannot come together and say that you are fixing prices because the law says that there should be competition in business and not pegging prices to a particular amount. When you peg prices, you don’t give passengers choices. I also believe that the hike in air fare is just for a while, it will pass because the airlines cannot sustain it as they will fly empty if it continues .
The cost of aviation fuel is not sufficient reason to increase flight tickets and pegging it at a particular amount because you can’t make all the profit at a go. International airlines also use aviation fuel but they have not increased the price of fares. I was speaking with the General Manager of an international airline and he said if there is going to be an increase in fare, it should be according to your capacity. What is your stake in it? You want to make all the profit in one ticket and in one trip?
When Covid happened and all the airlines were down, some of our airlines still brought in new planes, so they should see it as an investment into the business and do their math. If I decide to buy a property, does it mean that if I used to charge my clients $50, I will now start charging $100 because I bought property at a higher cost? The property is an investment, so these airlines should go back to the drawing board, look at their capacity and re-evaluate their business strategy. There would definitely be an increase, but it should not be a flat rate for everybody.
Passengers’ response to fare hike
Passengers are really complaining but unfortunately, travelling by air has become a necessity due to high level of insecurity . It is the safest mode of traveling. Passengers are grumbling but they are buying the tickets with so much pain because they don’t have a choice. You should never put people in a situation where they don’t have a choice.
Anti-competition
At our last Lagos conference, the speaker did a presentation on anti-competition and reducing market distortions and from there, we extended it to anti-trust. There is no real difference between the two but anti-trust has the responsibility to ensure that you guard against monopolies and any process that would exclude some other businesses. When you exclude some others from the business, you become a predator and no one else can stop you and at the end of the day, the consumers suffer, that is why it is the responsibility of any responsible government to ensure that trust policies and laws are properly interpreted and executed. It is for balance and to guide against monopolies. For instance, in the UK, you cannot bring a product and sell at N5, when every other person can only sell at N20. The government would watch you because it knows that the only reason you want to sell at N5 is because at the end of the day, you have a motive. When you kill other businesses that can only sell at N20, you then increase yours from N5 to N50 and no one would be able to control you.
We are not saying that we are anti-globalism but if you go and set up a company in the UK, from the day you are setting up a company, they give you the rules. A lot of Nigerian travel agents are losing businesses to the corporates because they will tell you that there is a global alignment and you have to use their foreign travel agents and what does that do? It hinders local travel agents from getting jobs, so we have to address this. In the oil sector, the protection of local content has been addressed. A lot of us are losing businesses because of this issue of global alignment, so you have to deal with a foreign travel agency and all the money that should stay in our economy is being taken away and will cause a pressure on forex.
We need a structure to be put in place to protect local content and in doing so, we are also protecting consumers. Some of us are in this industry not because of the money, it is a passion for us. This effort is to protect our businesses and the industry and to protect the end users.
