Keyamo condemns FCCPC statement on Air Peace

The Minister of Aviation and Aerospace Development, Festus Keyamo, has condemned the statement by the Federal Competition and Consumer Protection Commission (FCCPC) against AirPeace, saying the commission should have consulted with the Nigerian Civil Aviation Authority (NCAA) before making such comments.

The minister, during an interview on a television show monitored by The Guardian on Sunday, described the statement by FCCPC on the presumed airfares by AirPeace as very careless.

He stated: “I think it was a very careless statement by the agency, without even consulting the core agency involved in regulation, which is the NCAA. The powers to regulate for the airline to inform about their price increase and all that is domiciled in NCAA; that is the core agency.

“We cannot have an agency of government floating all over the place, having all the powers. That means if there’s a problem with yam pricing, they will go and call the agricultural minister.

“I don’t think their powers are stretched to that point, but I say that with apologies because also I’m a minister of government.

“They should have contacted the NCAA for them to look at the figures and the books, which we have been doing, so we would have given them facts. But to single out a few airlines while we are struggling to expose them to the world for them to get more enhanced capacity was a bit careless.”

Keyamo said the main issue affecting the aviation sector is the limited capacity of airlines to acquire aircraft and service their routes, compounded by the impact of foreign exchange (FX) on operations.

He said, “Nigeria’s own is even a more precarious position because it is not about maintaining the aircraft alone, but in terms of renting or hiring the aircraft itself, which is what they call ACMI — that is aircraft, crew, maintenance, and insurance.”

An ACMI contract, also known as wet or damp leasing, is an agreement between two airlines, where the lessor agrees to provide an aircraft, crew, maintenance, and insurance (ACMI) to the lessee in return for payment on the number of block hours operated.

Keyamo said most of the airline operators operate on ACMI, “which is what they call wet leases. Wet leases are also foreign exchange-based because you have to service your obligations under those ACMIs — that is when you take aircraft on lease.”

“When you take them on lease, you take them with the aircraft, the crew, insurance, and everything. All of these are foreign exchanges,” the minister said.

With the fluctuating nature of the Naira against the dollar, you expect that it will affect their cost of operation.

“What we are therefore doing is to ensure that we expose them to the market across the world where they can now access aircraft on very good terms, and this will impact on the prices of tickets and their cost of operation.

“That is what led us to addressing the issue of the practice direction pursuant to the Cape Town Convention. That is the core of the problem of the aviation industry that this president and the vice president graciously supported us to get to.”

The federal government officially signed the Cape Town Convention (CTC) practice direction to enable domestic airline operators to access aircraft on dry lease on September 12.