DR CONGO: Ticket Prices Declining, Conflicts Between The Minister And David Blatner Of Bahati FlyCAA

The Minister of National Economy, Modeste Bahati Lukwebo filed a complaint Tuesday, August 4, against the owner of the Compagnie Africaine d'Aviation (FlyCAA), David Blattner, the General Prosecutor of the Republic. He continues the number one FlyCAA for harmful accusations and slander in a case of the fee schedule of airline tickets.
In correspondence dated July 23, with a copy reserved to the President of the Republic, the Prime Minister and the Presidents of both Houses of Parliament, David Blattner accused Modeste Bahati want to increase the prices of airline tickets while his company wants them downward. Allegation that has frustrated the Minister of Economy, according to his office deputy director, Guylain Malere.

Genesis

The case dates back to 3 July, the economy minister called a meeting of the Tariff Commission and fight against slashing prices of air services on the home network. This commission will meet on 08 and July 9, 2015 in the hall of the Ministry under the chairmanship of Minister of Economy and technical work was conducted by Councillor in charge of Economic Regulation, Jean-Marie Kalumba. And in the presence of the Minister of Economy, one of Transport, Blue Sky, Congo Airways and Fly CAA.
In its communication, Bahati Lukwebo recalled the concerns of the Government to see the price of the ticket applied to date to be scaled down while maintaining the profitability of airlines. To do this, he suggested setting a tariff for a transitional period not exceeding three months, to allow the commission to deepen the reflection on the appropriate approach to be adopted in the calculation of tariffs under the variety of parameters to consider: various types of aircraft operated, disparity in operating costs of the companies, volatility of fuel prices, multiplicity of duties, taxes and charges.

In this report, it is stated that during the technical discussions on the setting of tariffs, members analyzed the costing parameters for operating an A320 type aircraft and suggested, given the tariffs Fly CAA PKT levels of 0.18 to 0.23 and the minimum rate or the maximum rate to 0.24, unlike the PKT (Price kilometer transported) of 0.32 cents per FlyCAA applied in its de facto monopoly. Regarding the route Kinshasa-Lubumbashi, given the large passenger flow on this line, the Committee was called upon to apply the PKT 0.13 cents.

The minutes of the commission was signed by all parties except FlyCAA. But in his letter, said the deputy cabinet director at the Ministry of Economy, the owner of Fly CAA claims to want the minimum of 0.11 cents PKT and accuses Modeste Bahati to object. Ministry of Economy of the experts also accuse FlyCAA to offer this tariff to eliminate competitors who they believe will work in the loss. So to end the speculation observed in the prices of airline tickets sold by FlyCAA that the Commission has developed a fee schedule to major destinations, including Kin - Lubumbashi (260 dollars), Kin - Goma (351 dollars) Kin - Bukavu (412 dollars), Kin - Kindu (270 dollars), Kin - Kisangani (281 dollars), Kin - Gemena (229 dollars), Kin - Mbuji-Mayi (218 dollars), Kin - Kananga (192 dollars) Kin - Mbandaka (148 dollars).

The refusal of Blattner

Following an exchange of correspondence between the Minister and the DG CAA Fly, Modeste Bahati ask Mr. Blattner to sign, within seventy-two hours of receipt of the letter, the record already recorded by all other participants the aforementioned meetings and to allow the closing of this issue by signing a decree. That will not happen!

It is in this context that the letter from Mr. David Blattner addressed to the highest authorities of the country.
In acknowledgment of the letter of the Director General of CAA, we read the following: "Your determination to want, against the opinion of all experts, apply PKT 0.115 floor price instead of PKT 0 18 considered the minimum threshold of profitability in compliance with the standards of civil aviation, reflects the opinion of all experts, including those of the Federation of Enterprises of Congo (FEC), a clear desire to harm free competition in the sector and ultimately the development of the activities of other companies are operating or newly arrived ... "wrote the minister, adding that" some might even consider that your sudden availability to apply tariffs, considered excessively low by experts, is simply an admission of outbidding practiced in your usual rates, which calls for a substantial recovery to allow the Treasury to recover sums unduly levied against consumers. "