From John-Abba Ogbodo (Abuja) and Wole Shadare (Lagos) Business Services - Business News
THE Federal Government yesterday, insisted that there was need for British Airways to reduce fares on its London-Nigeria route.
The government also directed the aviation firm to pay compensation to Nigerian customers, who had in the past, paid exorbitant charges.
But the airline said it was not possible to cut fares or make refund because of the high cost of doing business in Nigeria.
Addressing the Senate panel at the start of a three-day public hearing, in Abuja, yesterday, Oduah and her Foreign Affairs counterpart, Ambassador Olugbenga Ashiru, condemned the charges imposed on travellers on Abuja- Lagos- London routes, describing them as unacceptable. The two ministers said there was no justification for the high fares, pointing out that the fares charged on Accra-London routes were less than those of Nigeria-London route by $4,000.
Ashiru blamed the supervisory agencies for the situation, saying “what we see happening is failure of the regulatory agencies to play their roles. What is happening is price fixing, which is punishable. There is no justification for it. The Abuja-Lagos- London flight is the most expensive in the world. If the regulatory agencies had been doing their work, it would not have happened. Nigeria has been ripped off. In the United States of America, if unapproved fares are charged, they get punished.”
He recalled that former president, Chief Olusegun Obasanjo negotiated with British Airways and Virgin Atlantic for moderate charges before they began operations during his administration and wondered why the two airlines resorted to high charges.
The minister, however, cautioned that the situation should not be allowed to degenerate to a diplomatic row.
Oduah, expressed dismay over the action by the two airlines, saying ‘’the imbalance is not acceptable. There is no basis for the disparity. I made it abundantly clear to the industry and specifically to the British Airways and Virgin Atlantic that the imbalance would not be tolerated and must be dismantled. Nigeria supports profitable operations when the profits are reasonable but rejects exploitation and unreasonable excessive profiteering by exploiting her people.”
The committee led by Senator Hope Uzodinma, expressed concern that despite the fact that the distance between Ghana and UK is longer than Nigeria and UK, travellers from Nigeria had hitherto been made to pay higher.
Country Commercial Manager for the British carrier, Kola Olayinka, explained that distance and geographic location were relatively minor factors that determine fares, adding that the most important factors were market size, demand mix (the proportion of premium to economy traffic), comparative operational costs and capacity.
Olayinka said it was totally incorrect to state that all of BA’s fares on the Lagos/London and/or Abuja/London routes are higher than those on the Accra/London route, adding that apparently, the highest premium fares from Lagos had been directly compared to the lowest premium fares from Accra.
“We emphasise that it is the passenger, who must have the choice of which airline he or she travels on and at which level of service he or she wishes to pay for, which can only be achieved by a competitive industry, he said.
The government also directed the aviation firm to pay compensation to Nigerian customers, who had in the past, paid exorbitant charges.
But the airline said it was not possible to cut fares or make refund because of the high cost of doing business in Nigeria.
Addressing the Senate panel at the start of a three-day public hearing, in Abuja, yesterday, Oduah and her Foreign Affairs counterpart, Ambassador Olugbenga Ashiru, condemned the charges imposed on travellers on Abuja- Lagos- London routes, describing them as unacceptable. The two ministers said there was no justification for the high fares, pointing out that the fares charged on Accra-London routes were less than those of Nigeria-London route by $4,000.
Ashiru blamed the supervisory agencies for the situation, saying “what we see happening is failure of the regulatory agencies to play their roles. What is happening is price fixing, which is punishable. There is no justification for it. The Abuja-Lagos- London flight is the most expensive in the world. If the regulatory agencies had been doing their work, it would not have happened. Nigeria has been ripped off. In the United States of America, if unapproved fares are charged, they get punished.”
He recalled that former president, Chief Olusegun Obasanjo negotiated with British Airways and Virgin Atlantic for moderate charges before they began operations during his administration and wondered why the two airlines resorted to high charges.
The minister, however, cautioned that the situation should not be allowed to degenerate to a diplomatic row.
Oduah, expressed dismay over the action by the two airlines, saying ‘’the imbalance is not acceptable. There is no basis for the disparity. I made it abundantly clear to the industry and specifically to the British Airways and Virgin Atlantic that the imbalance would not be tolerated and must be dismantled. Nigeria supports profitable operations when the profits are reasonable but rejects exploitation and unreasonable excessive profiteering by exploiting her people.”
The committee led by Senator Hope Uzodinma, expressed concern that despite the fact that the distance between Ghana and UK is longer than Nigeria and UK, travellers from Nigeria had hitherto been made to pay higher.
Country Commercial Manager for the British carrier, Kola Olayinka, explained that distance and geographic location were relatively minor factors that determine fares, adding that the most important factors were market size, demand mix (the proportion of premium to economy traffic), comparative operational costs and capacity.
Olayinka said it was totally incorrect to state that all of BA’s fares on the Lagos/London and/or Abuja/London routes are higher than those on the Accra/London route, adding that apparently, the highest premium fares from Lagos had been directly compared to the lowest premium fares from Accra.
“We emphasise that it is the passenger, who must have the choice of which airline he or she travels on and at which level of service he or she wishes to pay for, which can only be achieved by a competitive industry, he said.
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