Federal Govt Fines British Airways $135m, Virgin Atlantic $100m | Welcome to Linda Ikeji's Blog

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Thursday 17 November 2011

Federal Govt Fines British Airways $135m, Virgin Atlantic $100m

From the Associated Press
Nigeria's government has fined air carriers British Airways $135 million and Virgin Atlantic Airways $100 million over what it describes as unfair trade practices that hiked up airfare prices in the oil-rich nation, an official told The Associated Press on Thursday.
The official said the fines came after a six-month investigation into fuel charges added to fares from Lagos' Murtala Muhammed International Airport to London's Heathrow Airport. The official said the two airlines acted together to inflate prices as far back as 2004.

The official spoke to the AP on condition of anonymity as the Nigerian government did not want to publicly acknowledge fines as negotiations with the two carriers continue. Nigerian newspaper ThisDay published a story Thursday saying the government had levied the heavy fines.
British Airways, which is run by International Consolidated Airlines Group PLC, rejected the allegations in a Thursday statement. British Airways has been flying to Nigeria, a British colony until 1960, for more than 75 years.
"We are vigorously defending our position," the statement read.
Virgin Atlantic Airways Ltd. issued a statement Thursday saying it had been contacted by the Nigerian Civil Aviation Authority over the fuel-charge investigation.
"We have fully assisted the NCAA with its inquiry and we do not believe we have breached Nigerian law," the statement read. "We will be robustly defending any suggestion to the contrary."
The airlines also will be required to provide compensation for affected passengers, which could mean millions of dollars more in losses, the official said.
The fuel charges appear to have spiked in just over a year, from 2.50 pounds ($4) in 2004 to 30 pounds ($47) in 2005, according to an analysis done by the Nigerian government and obtained Thursday by the AP.
The fee "was nothing but an additional fare," the analysis read.
In trading Thursday, IAG stock dropped 2.10 pounds ($3.30) to 141.40 pounds ($222).
The Nigerian government's push to accuse the two airlines of price fixing has precedent abroad. In the U.S., 21 airlines have paid more than $1.7 billion in fines over artificially inflating passenger and cargo fuel charges, one of the largest criminal antitrust investigations in U.S. history. Both British Airways and Virgin Atlantic found themselves ensnared in that probe, with British Airways fined $300 million in August 2007.
However, the fines come as Nigeria is engaging in talks with the United Kingdom over Nigerian carrier Arik Air's loss of spots at Heathrow. The Nigerian airline said a government agreement entitles it to 21 slots at U.K. airports, but the airline refused to pay increased rates for some Heathrow slots, which are administered by a private company.
The Nigerian official denied the fines came as a response to the conflict, which has seen the Nigerian government threaten to cut British Airways flights in Lagos in retaliation.
Other foreign carriers also fly in and out of Lagos' international airport, a major hub for West Africa. That airport alone saw 2.3 million passengers pass through it in 2009, according to the most recent statistics provided by the Federal Airports Authority of Nigeria.
The official said authorities will continue their investigation to examine the high prices charged by other foreign airlines as well.
Culled from the Associated Press

23 comments:

Fierce said...

I'm so proud of Naija right now. Jonathan, way to go. Next one is easier visa rules and respect for Nigerians. So loving this!!!!!

RT rltk said...

Good luck to the Nigerian government getting that money from them

Kelechi said...

Good. On this matter, I 100% support Nigerian Government and Goodluck Jonathan and his administration, but I don't agree with the amount of the fine. It's like imposing a N5 fine on Aliko Dangote for all the (unfair and unjust) monopoly his companies enjoy in Nigeria. The amout of this fine is damn too low. I'd prefer, "Federal Govt Fines (racist) British Airways $135 trillion, Virgin Atlantic $100 trillion, their white ancestors $950 trillion"

bongex333 said...

this is good and bad, good in the sense dat at least dey ll take us seriously and bad,vis issues ll spring up again.......9ja sef

bongex333 said...

this is good and bad, good in the sense dat at least dey ll take us seriously and bad,vis issues ll spring up again.......9ja sef

bongex333 said...

this is good and bad, good in the sense dat at least dey ll take us seriously and bad,vis issues ll spring up again.......9ja sef

Anonymous said...

Guess who is going to pay for it this xmas??..talk about timing!!..9ja Govt really lack tack..
And the Visa stuff is just ridiculous..9ja Govt need to bring them to order on this..at least get a refund of sorts on refusal!!

Anonymous said...

was meant to say lack tact..not tack..b4 dem English teachers pounce upon the thang!!

Me said...

good job. up naija

Anonymous said...

Way to go presido..

Fummy said...

Way to go 9ja!!! More of this

D'lola said...

Oh Please... next thing you know the Airlines will "settle" rather than go to court and some woh-woh politician or Minister of Transportation will walk away with $67.5m and $50m retirement money, while the airlines jejeli continue operations... No muss... No fuss...

Anonymous said...

Some people here are daft. Who goes where more?

Naija folks to the UK or Brits to Naija?

Slapping that fine on the airlines will only make things more expensive and difficult for naijas long term, plain and simple.

omo yoroba le mi o said...

How do I insert BBM dancing and clapping smiley. Good job jona. Finally a presido that has been somewhat transparent and will not bow down to insult and unfair treatment of its citizens... United kingdom, we have had enough o! Pay up! Part of that money better come to me. I flew those bastards for 12yrs B4 saying no more! I do kinda like Virgin tho'..@kelechi, ur comment was hilarious!

Green White Green said...

This is def a Win Win situation for Naija, because this is the season to make money for all airlines, so other airlines will cash in on this opportunity and plan for trips to Naija at a reasonable rate. Trust me airlines will be negotiating now. They read the news!!!!

I say way to go My President.Much respect! Somebody has to take a stand and actually start from somewhere. They have to know we have boundaries and we are not monkeys and slaves and they are not doing us a favour by flying us to their country after making us pay so much to get the visas after many many rejections.

When you now get to the country they treat you like seconfd class citizens. Time to rebrand Naija, wetin sef??

I am so up for this and other upcoming measures to tell the so called 'developed' countries we 've got brains and we know how to use it. I bet the analysts in this case payed through their noses to get trained in some of this counties (not necassarIily, but quite possibly)

I LOVE NAIJA, CAN'T SAY IT ENOUGH!!!!NIGERIA WE HAIL THEE!!!

praisediva said...

But come ooo, what happended to our own Nigeria Airways???is it not a shame that our "very rich" naija does not have a single Government owned airways......as long as everything is privatised, we all will pay thru our noses to travel out of this country by air....eeish

grace said...

hia how can nigerians forget the weightier matters? security is very poor, electricity no dey, bad roads nko? e 2 dey! ehn please juh its not like this fine would reach our pockets rather we woould be the ones suffering from this cos they could hike up the ticket price! i pity people going bck in dec! jona start focusing on one of the important issues choose electricity,road or security and make a difference there before u focus on the lesser matters! i have spoken:)

Glory said...

@Anonymous 10;09pm; Expand that mind of yours sometimes. If BA and Virgin stop flying, other airlines can then lobby to get in and make the most of this oportuniy whilst sticking to new FG rules on taxes, fares.

Na only BA and Virgin dey exist? Do you only shop in one store/brand for the rest of your life. Haba!!!
Do you knwo how we have enriched those airlines with our fares etc. I aagree with Kelechi, he fat cats called directors and shareholders dey chop the money dey live like kings, you dey here dey say, this is the only way to go. Myopic view I must say.

Glory

Na wah

Anonymous said...

bastards.... i wrote to virgin a few years back now on my suspicion that their pricing needs clarification. i noticed that throughout the year a fligt to lagos from uk nver seem to have high or low season, its just ridiculous thru out, meanwhile they are always doing sales and low and high season prices to US which is twice as far and onviously uses more petrol and isnt always full to the bream as lagos flights. i got stupid reaponses and gave up after several emails back and forth. they make all their money form lagos flight, all their losses from other destinations are made up from the naija flight which is aaaaalways sold out. this route is their cash cow, golden egg. they will never want to admit to this fixing or want to change. the bastards. i trully hope that for once, the naija gov follows through n this abuse and crime. its the gratest and most blatant piss take ever. i pray they dont take bank hand bribe settlement and silence this case. it will be difficult but not impossible. its been going on far too long and the naija route is keepin these major airlines in profit. now uk wants to attack arik??? stop it!

Dani

Anonymous said...

lol @ fining them. If it is a going foward agreement, then fair. otherwise it just seems erratic.

Mena UkodoisReady said...

@Green white Green, I second most of what you wrote!

Mena

http://efemenaoreoluwa.blogspot.com/2011/11/message-to-african-american-women-you.html

Anonymous said...

since 2004, and its now they are finding out, anyway hope things will be better soon

Anonymous said...

This should be the minister of aviation's doing stella oduah,the woman na tough woman, once worked with her before she became minister.

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