Air Peace Limited has denied charging exploitation fares on its routes, arguing that operating cost for a one-hour flight exceeds N14 million, even as the Minister of Aviation, Festus Keyamo debunks allegations by the Federal Consumer and Customer Protection Agency, FCCPC, against Air Peace as false and misleading.
Making the denial at a news briefing in Lagos at the weekend, the airline’s Chief Operating Officer, COO, Mrs. Oluwatosin Olajide said that the company requires about N7 million to purchase 4,000 litres of jet A1 (aviation fuel), which is currently sold for N1,400 per litre. She said that for the maintenance of the airline’s aircraft, crew, maintenance, insurance, and ACMI, the company spends about $4,000 for an hour on a flight.
According to the COO, N5 million is required for every one-hour flight, a figure significantly higher than what operators’ counterparts pay globally.
“There are factors that define operating cost and they include aviation fuel which takes between 60 per cent to 65 per cent of the operating cost.
“One litre of fuel is N1,400. If I have to operate a one-hour flight from here to Abuja, Port Harcourt, and Owerri, I will use about 4,000 litres of fuel.
“So, on average, a one-hour flight costs N7 million on fuel alone. Also, ACMI costs 4,000 dollars for leasing planes, considering the challenges we are currently facing”, Olajide said.
She explained that on average, operating a one-hour flight costs N7 million, with an additional N7 million for fuel, bringing the total to N14 million.
She noted that insurance for a one-hour flight costs an additional N5 million.
“For financing, we pay about 30 percent to borrow money, while foreign airlines pay around three percent. Also, Nigerian airlines pay four times more than others for spare parts”, she added.
According to Olajide, given the operating costs of Nigerian airlines, it is not easy to operate with the current airfares.
She emphasised that a one-hour trip within Nigeria should cost no less than N500,000.
Speaking on the recent report of fare exploitation, Olajide said that the allegation had cost the airline a major international slot.
She also clarified that the Federal Consumer and Customer Protection Commission (FCCPC) only invited the airline for inquiry and not an investigation as reported by some media.
She said that the Chairman of the Airline, Dr. Allen Onyema, honoured the invitation.
She, however, said that FCCPC could have directed the inquiry to the Nigeria Civil Aviation Authority (NCAA), the regulator of the airline.
Olajide recalled the airline’s selflessness during COVID-19, Xenophobia attacks, and the evacuation of stranded Nigerians from foreign countries at no cost.
It would be recalled that the FCCPC had on December 2 written to the airline, inviting them for an inquiry on the complaint of fare exploitation.
The FCCPC later clarified that it was not conducting an investigation into the airline but rather an inquiry, contrary to reports circulated in the media. The agency had reportedly warned Air Peace against obstructing the investigation and inciting other airlines to raise fares.
It also stated that some petitioners had accused Air Peace of canceling flights arbitrarily without care or compensating passengers for canceled flights.