7 November 2012

Nigeria: Senate Committee Fines BA U.S.$135 Million, Virgin Atlantic U.S.$100 Million

Photo: Vanguard
Airfare disparity: Senate summons BA, Virgin, minister, others

The Senate Committee on Aviation has ordered the British Airways and the Virgin Atlantic Airways to pay a fine of $135 million and $100 million respectively for conspiring to fix prices at the expense of Nigeria, operating a duopoly to the detriment of other airlines and engaging in the passenger fuel surcharge scam.

The committee, in its report on the violation of aviation laws and practice by foreign airlines and lapses in the operations of regulatory agencies, yesterday ordered the Nigerian Civil Aviation Authority (NCAA) to work with the Ministry of Justice and the Economic and Financial Crimes Commission (EFCC) to compel both airlines to pay the fines in line with the Civil Aviation Act 2006.

Presenting the report, the Chairman of the committee, Senator Uzodinma said British Airways and Virgin Atlantic Airways were found guilty of the offences.

The lawmaker added 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.

Uzodinma, who noted that both airlines had been tried in the US and Britain and found guilty of the offences, said his committee also found the economic regulatory powers of the NCAA too weak, adding that all existing Bilateral Services Agreement (BASA) need urgent review.

According to the committee, Lufthansa Airlines is currently indebted to the NCAA to the tune of over $14 million being royalties due to the Federal Government of Nigeria.

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