An Assessment Of The Relationship Between Airfares And Aircraft Movements In Nigeria

An Assessment Of The Relationship Between Airfares And Aircraft Movements In Nigeria

Abstract

This study carried an assessment of the relationship between airfares and aircraft movements in Nigeria with focus on Murtala Mohammed International Airport( MMIA). The study espoused empirical exploration system. Data on the relationship between airfares and aircraft movement, airfares and air passenger movement, airfares and air weight movement and airfares and aeronautics energy were sourced from Nigerian Airspace Management Agency( NAMA), Federal Aviation Authority of Nigeria( FAAN) and Nigerian Civil Aviation Authority( NCAA) for this study. The data collected and anatomized are presented in tables, numbers, histogram and bar maps. The study revealed that airfares increase has insignificant influence on air passenger movement volume in Murtala Mohammed International Airport, that airfares increase has insignificant influence on air craft movement volume in Murtala Mohammed International Airport, that airfares increase has insignificant influence on air weight movement volume in Murtala Mohammed International Airport and that there have been significant increase in airfares as a result of adding cost of aeronautics energy in Murtala Mohammed International Airport. Recommendation was made that airline companiesprotect themselves from unpredictable oil painting costs, and occasionally to indeed take advantage of the situation, airlines generally exercise energy hedging. They do this by buying or dealing the anticipated unborn price of oil painting through a range of investment products, guarding the airline companies against rising prices.

Chapter One

Preface

Background of the Study

The Aviation assiduity can be defined as those conditioning that are directly related to the transporting of people and goods by air from one position to another( Onyeanu, 2009). Airline assiduity plays a major part in every countries profitable exertion and it aids in opening up of the countries request to both original and foreign investors( Samuel, 2006). Globalization has made it indeed more necessary for everyone to be every where at anytime. Over2.1 billion passengers departed on listed trip in 2006( IATA 2007). Strong economists saw transnational passenger demand grow by5.9. Driving these development are farther request liberalization and the vacuity of further energy effective and longer range aircraft that are more suitable to serve thinner routes.

Making a trip by air involves a set of complex gests over a period of hours with numerous openings for the air passengers to be pleased and comfortable, or disappointed, frustrated and rankled( Berry and Lampo, 2004). Air passengers make opinions on a particular flight to board grounded, largely on their perceived safety and once gests with the airline, which in turn depend on the quality of service product handed by the airline. Airline drivers decreasingly strive to attract, make, and retain guests through the quality of their service product immolations. In this regard, numerous airline drivers invest heavily on innovative, streamlined, and effective service systems to ameliorate performance and remain in the competition( Olsen, 2005), still, Churchill and Peter( 1998) observe that not numerous of these investors have developed competitive edge over others. In Nigeria, for case, some airlines have indeed suffered entropy(e.g., acquainted, Barnax, Concorde, ADC, Sossoliso airlines). maybe, unfit to give the required service quality, some of these airlines endured low patronage and bottomless profit periphery; and ultimately collapsed.

Air Fares are the price charged by airline drivers for transporting a passenger from one destination to another destination and goods from one point to another point. The airline assiduity is unique in that there are colorful airline chow types. Imagine this 2 guests walk into a original consumer electronics store to a purchase a TV. They both walk out with the exact same television same size, same features, same model number but one client is charged$ 350 further than the other. It sounds outrageous when making the comparison to any other assiduity, but this is fully accepted in the airline assiduity. Two frugality passengers on a flight from San Francisco to New York compare their ticket prices only to find that one passenger paid hundreds of bones more for the exact same flight( and they both still have to pay for$ 7 redundant for a pillow and a mask). Believe it or not, there’s a system to the madness, and understanding this system can help you find the smallest fares for your guests. Or if that’s not possible, you can educate your guests on why you do n’t have access to those airline chow types.

Air passengers are most likely to value low cost airfares and hitch-free and stress-free air trip experience. Air fares are critical in air passenger choice of flight booking. guests are antipathetic to airlines that are associated with ceaseless unexplained detainments( Asiegbu, 2011), flight cancellations and track record of avoidable air mishaps. Air trippers consider marking systems, flight connections, processing time, security checks, reserving systems, Routine and periodic servicing and conservation systems of aircraft, refunds that accompany flight cancellations and passenger experience operation systems of airlines in making decision to board any airline.

The aeronautics assiduity as we know it in the current form went through a long development. The process of internationalization, globalization, and numerous other factors greatly increased the quantum of travelling people. Trade agreements, expansion of weight transportation caused lesser mobility of business trippers . The geste of rest passengers also changed. All these factors have had a notable impact on creating of the airline airfare strategies.

Traditional carriers can offer two different perpendicular quality products( frugality cabinvs. business cabin, refundable ticketvs. nonrefundable ticket, personality chesterfield accessvs. no personality chesterfield access), while low- cost carriers offer only one type of product( frugality cabin, nonrefundable ticket and no personality chesterfield access). guests for this product could be divided into two types of trippers , business trippers and rest trippers . Both of these orders have different preferences and look at the quality product. It’s important to flash back that these differences have significant impact on airfares of airline. thus, this study is aimed at probing the relationship between airfares and aircraft movements in Nigeria.

Statement of the Problem

There are four crucial factors hanging Nigeria’s airline assiduity. One is that everything about aircraft conservation, including repairs and most frequently specialized labor force is imported and C- check is done overseas. So in a recession whereby over N400 is swapping for$ 1, it’s delicate for Nigerian airlines that vend tickets in naira to raise enough finances to maintain their aircraft.

Two, over 40 per cent of functional cost is spent on aeronautics energy. moment that product sells at N230 per litre because it’s imported. Nigeria has refineries that aren’t working. They weren’t privatised and under the Nigeria National Petroleum Corporation( NNPC) they’ve not been put to good use for times, so Nigeria imports its energy products.

Three, airfares don’t reflect the factual cost of operation because of the low disposable income of Nigerian citizens. At the current cost of aeronautics energy and conservation, for a Nigerian airline to make profit it should charge about N45, 000 for one- hour flight, according to aeronautics judges. This quantum will feel outrageous but that’s the factual pricing that could induce profitable profit for airlines. But airlines can not charge N45, 000 for one- hour flight. If they do they would lose guests.

The fourth factor is that Nigerian airlines have lost over 40 per cent of their passenger business since February this time due to the downturn of Nigeria’s frugality. The passenger business continues to deplete as recession sets in and the assiduity continues to deteriorate.

It’s all these challenges that are hanging the operations of Nigeria’s domestic airlines. Aero and First Nation Airways have suspended their listed services and there’s fear that other airlines may join as the frugality bites harder and as they find it delicate to continue to maintain their aircraft and purchase aeronautics energy at a veritably extravagant rate. Aero Contractors on Wednesday blazoned suspense of listed services from Thursday September 1, 2016. A statement from the Chief Executive Officer,Capt. Fola Akinkuotu, said the development was part of the strategic business realignment to budge the airline and return it to the part of profitability. The airline said this business decision, which is a result of the current profitable situation in the country, has forced some other airlines to suspend operation or outrightly pull out of Nigeria. In the case of Aero, Akinkuotu said the airline had faced grave challenges in the once six months, which impacted its business and by extension the listed services operations. “ These factors, according to him are both internal and external environmental factors that have made it delicate for the foremost airline to continue its listed services, ” the airline said.

The growth and performance of domestic airlines and their ultimate survival is hovered by the burden of managing these challenges. The possible result to the forenamed challenges is connected with airfare price of airline drivers. Airfare price of airline drivers is connected with aircraft movement, air weight movement and air passenger movement. thus, this study is aimed at probing the relationship between airfares and aircraft movements in Nigeria.

Points And Objects Of The Study

The end of this study is to carry out an assessment of the relationship between airfares and aircraft movements in Nigeria. Other objects are;

1. To determine the relationship between airfares and air passenger movement in aeronautics assiduity in Nigeria.

2. To discover the relationship between airfares and aircraft movement in aeronautics assiduity in Nigeria.

3. To examine the relationship between airfares and air weight movement in aeronautics assiduity in Nigeria.

4. To pierce the relationship between airfares and aeronautics energy in aeronautics assiduity in Nigeria.

Exploration Questions

The following exploration question were sought so as to give results to the problems of the study.

1. Will airfares affect air passenger movement in aeronautics assiduity in Nigeria?

2. Is there a relationship between airfares and aircraft movement in aeronautics assiduity in Nigeria?

3. Can airline airfares determine air weight movement in aeronautics assiduity in Nigeria?

4. What’s the recrimination of high aeronautics energy on airfares in aeronautics assiduity in Nigeria?

Defense of the Study

Transportation is an essential part of profitable development. It’s one of the indicators for measuring the development of a country. Nigeria’s field transport structure has been linked as a pivotal element for the profitable development of the country FGN( 2007). A good transportation network expands profitable conditioning by perfecting availability and facilitates movement of passengers, matters and weight goods to all the recesses and cronies of the country. According to Oni and Okanlawon, transport is the foundation of civilization. As the society and profitable associations come complex, the applicability of transport grows. Also, the demand for transport is a deduced one, because it depends on the demand for the goods carried or the benefit of particular trip and each trip is unique in time and space. Hence, the demand for transport services increases with the extension of the input- affair connections of an frugality. Transport infrastructural development remains a major tool for achieving meaningful development.

Compass of the Study

This study is an disquisition of the relationship between airfares and aircraft movements in Nigeria. This study won’t involve all airline drivers in Nigeria aeronautics sector. It would be limited to information attained from Federal Aviation Authority of Nigeria( FAAN) and Nigerian Civil Aviation Authority Office only. This study limitation is farther constraint by time, finance and difficulty in information dispersion in Nigeria Aviation assiduity.

Study Area

Geographically, the megacity of Lagos lies in south- western Nigeria and lies roughly on longitude 3 ° 24′ E and latitude 6 ° 27′ N. It covers an area of 3,577sq.km. The Metropolitan Lagos extends over sixteen( 16) of the twenty( 20) Original Government Areas of Lagos State, and contains 88 of the population of Lagos State. Lagos is the lowest and most important megacity in the Federation of Nigeria. The country, which is located in the seacoast of West Africa, consists of 36 countries and a capital home. Nigeria shares borders with Benin, Cameroon and Niger. Lagos is one of the important metropolises in Nigeria, which is positioned in the south- western seacoast of Nigeria. The Metropolitan area of Lagos takes up to 37 per cent of the land area of Lagos State and houses about 90 per cents of its population( Unicef 1995, Aina 1994a). Lagos is a huge megalopolis which began on islets separated by creeks similar as Lagos Island that borderline the southwest mouth of Lagos Lagoon defended from the Atlantic Ocean by long beach spits similar as Bar Beach which stretch up to 100 km east and west of the mouth. From the morning Lagos has spread on the landmass west of the lagoon and the megacity, including Ikeja( Figs 1 & 2) and Agege, now reaches further than 40 km north- west of Lagos Island.