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NCAA authorises domestic airlines to increase fares

By on July 9, 2016

The Nigeria Civil Aviation Authority (NCAA) has directed domestic airlines to increase the fares payable on air tickets to ensure safe and efficient services to air travelers.
Specifically, the NCAA, which is the regulatory body for aviation in Nigeria, urged the airlines to make sure that airfares are in tandem with cost of operation, factoring in the high prices of aviation fuel, charges and other expenses incurred by providing service to passengers.

A top official of the agency, who would not want to be quoted in this report, explained that the NCAA authorised the hike in airfares to prevent airlines from compromising safety of travellers.

The regulatory body, the source, added, has warned that airlines that charge fares that do not reflect the current reality would be sanctioned because such airlines would be unable to effectively carry out routine maintenance of their aircraft and would therefore be tempted to cut corners and endanger the lives of air passengers.

THISDAY learnt that the regulatory agency is currently monitoring the operations of all the local carriers with the aim of ensuring they do no negate the rules.

The aviation industry regulator noted that financial regulation of airlines is part of the overall safety regulation aimed at averting accidents and major incidents.

“If local airlines want to operate safely, they will have to increase fares. This is because aviation fuel prices have increased; the prices are a reflection of the current exchange rate because we are importing. So for the airlines to continue to pay for fuel, pay for training and maintain their aircraft, they must have to increase fares; otherwise the airlines may be exposed to accident due to poor maintenance of their aircraft,” the senior official of the agency told THISDAY on Wednesday.

The source also confirmed that some airlines might likely go under due to the high cost of operation and liquidity problems. He pointed out that some new airlines have indicated interests to start commercial operations but they have to go through the stringent process of obtaining their Air Operator Certificate (AOC).

The source acknowledged that the number of domestic carriers is shrinking and expressed the hope that new airlines will join the market after obtaining their AOC.

“In a perfect situation it takes minimum of 90 days to obtain AOC; but that is in a perfect situation. This means that the airline applying has to meet all the requirements, which include pre-qualification, formal application, documentation, evaluation and demonstration. The airline must scale through security clearance before it is certified. The airline will explain how it wants to operate, the operational equipment and the last stage is to issue you certificate. New airlines have not joined the market because they are yet to meet the requirements to obtain AOC that will enable them to start operation,” the source told THISDAY.

A senior executive of a major airline also told THISDAY on Wednesday that it is practically impossible to charge low fares now because of the current increase in aviation fuel prices. The source queried how an airline that was compelled to pay about $500,000 for maintenance check on its aircraft can source the money without raising ticket fares.

The official insisted that to be able to pay the exorbitant price of aviation fuel and aircraft maintenance, inevitably the airlines must have to increase fares.

“You are paying more for fuel and it has to reflect in your fares; that is being realistic. The NCAA should monitor the airlines and look at their books and those charging low fares should explain to them how they are sourcing funds to maintain their aircraft at this period,” the official said.

But the airlines are said to be reluctant to increase fares in order not to drive passengers out of air travel particularly now that the appetite to travel has significantly depreciated due to the economic downturn.

“We have experienced slight increase in fares because we notice the appetite to travel has depreciated so high increase in fares will further depreciate the market and the airlines cannot operate without the passengers turning up to travel”, the official added.

 

[ThisDay]

One Comment

  1. Iniabasi

    July 9, 2016 at 7:31 am

    I don’t understand why ncaa will promote increased air fares payable on air tickets. The excuse that the increase will ensure safe and efficient services to air travelers is totally unacceptable. What happened to tax payers billions given to airlines as bailout? They must account for those billions. Every agency and unit within public and private sector involved in the initiation, release, distribution, implementation and control of such funds must first accounts for it to the last kobo before anybody talks about increment. If they cannot operate safely within the present framework, then they should close shop. Any attempt by the operators and regulators within and outside aviation industry to transfer their mismanagement to Nigerians without accounting for the tax payers billions will be rebuffed, enough is enough!