Thursday, November 8, 2012

■ NIGERIA: Government fines British Airways and Virgin $235m over price fixing - again.

NigeriaA Nigerian Senate Committee on Aviation on Tuesday ordered the Nigerian Civil Aviation Authority (NCAA) to work with the Nigerian Ministry of Justice and the Economic and Financial Crimes Commission (EFCC) in ensuring British Airways (BA) and Virgin Atlantic (VS) pay fines of USD135 million and USD100million respectively after both were found guilty on various counts of price fixing and coercion.

According to press reports, the charges leveled against the British carriers, and on which they were found guilty, were:
  • conspiring to fix prices at the expense of Nigeria,
  • operating a duopoly to the detriment of other airlines,
  • engaging in the passenger fuel surcharge scam.

British Airways 747 in Lagos
British Airways 747 in Lagos (KIwelumo)

Then, in April of this year,  Nigeria's aviation authorities threatened to ban foreign airlines operating in Nigeria over the alleged disparity in air fares, but postponed doing so until the outcome of the above mentioned probe by the Senate.

According to the country's aviation authorities, the differences between fares Nigerians are made to pay on the Lagos-London-Lagos route and what Ghanaians pay on the Accra-London-Accra route are: US4'239 for first class, USD1'055 for business class and USD92 for premium economy.

Presenting the report, the Chairman of the committee, Senator Uzodinma said British Airways and Virgin Atlantic Airways were found guilty of the offenses, adding that both airlines were also involved in the passenger fuel surcharge which, according to him, "is deceptive both in concept and implementation and is being used to deprive Nigeria of her statutory revenue running into hundreds of millions of dollars from the non-payment of the 5 percent ticket sales charge."

German carrier Lufthansa (LH) was also singled out as owing the NCAA over USD14million in royalties due to the Federal Government of Nigeria.

No comment as yet from either British Airways or Virgin Atlantic has been heard of.