Domestic Airline Operations And Management In Nigeria (Problems And Prospects)

Domestic Airline Operations And Management In Nigeria (Problems And Prospects)

Abstract

For the first half of the twentieth century, rail and road transport were the only forms of vehicular transport in Nigeria that opened up new areas. still, since World War II, Nigeria has endured another transport revolution in the preface of an air transport system. Though air transport is the least important form of transport in Nigeria in terms of total business volume, it faces an expanding part in the nation’s continued socio- profitable development.

In the light of the growing significance of air transport, and airlines in particular, this exploration work will concentrate on its functional and operation challenges. In addition, it’ll examine its growth and business trends, problems and prospects, as well as necessary recommendations for enhancement.

Attempt will also be made to compare and differ its functional standard with transnational airlines. In this environment, chi-square analysis will be applied to test the thesis of the study. The causes of low position of operations will also be exposed by correlation analysis, so as to explain its major characteristics and means of enhancement. Eventually, suggestion for farther studies will also be made at the end.

Chapter One

Preface

The history of air transport development in Nigeria is synonymous with that of Nigeria Airways( Filani 1986). Commercial Aviation began in Nigeria on May 15, 1946, with the West African Airways Corporation( WAAC). The WAAC disbanded in 1958, yielding its place to Nigeria Airways. The ultimate’s share capital of£ 5 million( N12 million) is divided into 60,000 shares of N200 each. Though the airline is a limited liability company, the civil government owns all of the shares. The shareholders are, thus, appointees of the government; the quondam Ministry of Aviation was government appointed and had a representative on the airlines board of directors.

still, the surge of deregulation in the airline assiduity in1978/79 has had serious impact on the operation of Nigeria Airways. The Nigeria Government deregulated the Aviation Industry in 1980, and this paved way for numerous airlines to be established. This system ended the dominating power of Nigeria Airways. Private Airlines similar as Okada, Gas, Aero- contractors,etc. started their operations for airline carriers. Deregulation created both openings and troubles because it forced them to operate without a fiscal safely net, which had set a lower limit for fares, handed by the government. During the 1980s numerous drivers and businessmen launched dozens of new airlines, utmost of which failed( eg. Harka and Hacco Airlines), and being carriers boosted competition by expanding into requests they hadn’t served preliminarily. multitudinous combinations passed latterly as carriers tried to gain a lesser share of the request and expand snappily. numerous of the airline insolvencies were again working in the assiduity, this time for some of the new so- called niche airlines, which have veritably many aircraft and limited routes.

Background To The Study

Assessment of unborn trends in aircraft movements and of passengers and freight business flows bolster the planning of aeronautics programs. Generally, the scale of air transport operations has changed out of all recognition since the hand of the Chicago convention at the end of 1944. slated domestic and transnational air services carried 9 million passengers in 1945; in 1999 the number of passengers passed1.5 billion for the first time. In fact, growth in passengers business has equaled about 10 annually, though the rate has braked as the air transport request has come more mature, from the 20plus recorded in the first ten postwar times to lower than 5 in recent decades. The affair of air transport has increased by a factor of thirty since 1960.

Although world gross domestic product( GDP), which is the broadest available measure of affair, increased by a factor of only3.8 over the same period, there’s a strong correlation between the two measures. Statistical analyses have shown that growth in GDP, reflected in adding marketable and business exertion and adding particular income and propensity to travel, accounts for about two thirds of air trip growth. Demand for airfreight service is also primarily a function of profitable growth and transnational trade. Other profitable and structural factors, which impact the rate of growth, include bettered services, reductions in airline fares, business globalization and changes in population and income distribution.

Airlines can respond to growth in the demand for passenger trip by cataloging their breakouts, using larger aircraft or achieving advanced cargo factors. During the 1970s they accommodated utmost of the rapid-fire growth in demand by introducing larger aircraft, which helped keep the growth in aircraft movements relatively small. Since the early 1980s, the trend in average aircraft size has leveled out and the rate of growth of aircraft movements has approached the growth rate for passenger business. Average cargo factors have bettered gradationally as a result of marketing enterprise and yield operation programmes, however there’s substantiation that the rate of increase is decelerating. The average stage length is also growing, by an normal of 1- 2 over the last twenty times, because of faster growth in passenger and freight business on long haul than on short- haul routes.

Airline yields have declined on average in real terms nearly every time since the preface of spurt aircraft. Airline fares and rates reflect changes in operating costs and competitive conditions. Between 1960 and 1998 real passenger profit yield per passenger kilometer fell by2.8 per annum on normal while freight yield per freight tone- kilometer fell by3.6 per annum on average. World listed airline operating cost per available tone- kilometer, or unit costs, declined by an normal of2.4 per annum in the same period. Always, the global trend and functional challenges are reflections of the situation in Nigeria. Airline operations and operation since the time of deregulation had gone through turbulent time and is now stabilizing the through government programs and increased in passenger movement.

Statement Of The Problem

The development of any nation be it developing or developed without dicing words is veritably great. Transportation plays an important part in the profitable, social and political life of every existent, group, society or a nation. thus, its significance can not be quantified. It contributes appreciatively to the profitable metamorphosis in colorful forms ranging from employment openings to profit generation, urbanization, trade and commerce functions.

Because of these abecedarian places performed by transport, there’s need to insure that the sector continued to be sustained so as to enable its positive donation remain in addition to expose or relate similar donation to the societal requirements from time to time. It’s this need to support profitable growth and metamorphoses that have led to the nonstop development of air transport in general.

In Nigeria, transportation of goods and services by air has grown in recent times at a faster rate than other modes of transport. moment, nearly 17 of passenger movements are carried by air. This contributes to the profitable development of Nigeria in the provision of employment and enhancement in communication. All these services and benefits do because of the complications in the socio- profitable terrain in which the air transport system operates. The more developed a society becomes, the more diversified is the frugality and the more the demand for air transport.

still, to constantly remain in business is challenge on its own. It’s painful that utmost original airlines don’t operate on the same position playing field with foreign airlines. Foreign airlines are adding their frequentness everyday, but domestic airlines are incapacitated because they weren’t given the occasion. It’s reasonable to trade bones frequence for jobs and structure so as to retain one’s capital and strengthening the country’s kingliness.

The domestic airlines in Nigeria need to be strengthened; and this was the reason for airlinere-capitalization policy in 2006. The policy was to correct some blights similar as poor services, poor commercial governance and essential bankruptcies. It was noted that the air transport sector in Nigeria has refused to grow because utmost airlines aren’t suitable or big enough to fly. utmost of them have lower than five airplane in their line.

Aim And Objects Of The Study

The study end at examining the characteristics and challenges of domestic airlines in Nigeria. In achieving this broad end, the following objects would be pursued

i) To examine the structure and operation of domestic airlines in Nigeria

ii) To estimate the challenges and prospects of domestic airlines in Nigeria

iii) To pierce the impact of government policy and regulation on airline operations in Nigeria

iv) To punctuate the strategies that can enhance airline profitable operations in Nigeria.

v) To establish the significance of airlines to profitable development of nations.

Suppositions To Be Tested

i) That domestic airlines operation in Nigeria is profitable.

ii) That poor operation of domestic airlines in Nigeria is responsible for its failure.

Defense Of The Study

Nigeria aeronautics assiduity in the last many times has been in state of depression with significant reduction in the airlines operating line. Though poor operation played egregious part in the present state of the assiduity, finance remains the bone of that sector. The capital- ferocious nature of the assiduity, in effect, has brought about the operation of aged aircraft whose handling cost is a major concern to the domestic carriers. This maybe informed the relinquishment of wet parcel option by utmost drivers in the country, as they can not go new bones due to prohibitive costs.

The prohibitive cost of conservation, has also lead to the grounding of further than sixty aircraft in the country, with utmost of them cannibalized to service the serviceable bones . In all about$ 200 million is being conservatively estimated to bring those aircraft back to operations.

also, airline operating cost is an important factor that affect their profitability and sustainability. These costs are heavily told by spurt energy prices. Large increase in oil painting prices in 1979 and since 2005 to date saw unit costs rise sprucely in 1980 and for the once three times; with listed airlines total cost compared with only9.5 of total operating costs in 1998.

Aircraft application, seating capacity and viscosity also have an important impact on unit costs. Productivity, too, has grown, by an normal of about3.5 since 1987 as airline lines have added more energy – and labour – effective aircraft and bettered their application. The long term trend of listed airlines fiscal performance has not changed but there have been fairly large medium- term changes in their operating results.

Feting the adding complexity of air trip and the need to retain and sustain functional conditioning, this study will examine the colorful strategies available and in use by business associations including airlines. To be successful, a Nigeria domestic airline must do a better job than it challengers in satisfying target guests or consumers. Grounded on its size and assiduity positions, the airline must decide how it’ll place itself relative to challengers in order to gain the strongest possible competitive advantage. typically, an airline wants to design and put into action, the operation system that will best achieve its objects in its target request. This involves the operation functions of assaying, planning, perpetration and control. The control and evaluation of these operation functions and conditioning are carried out and necessary corrective measures are taking to make sure that the organizational objects are achieved.

Compass Of The Study

Air transport in Nigeria is fairly new; starting with the defunct West African Airways Corporation in 1946. The Nigerian Airways Limited took over the association of air transport services in 1958 enjoying absolute monopoly until when certified private drivers got blessing to round in some domestic and transnational routes.

 Moment, aeronautics conditioning have experienced tremendous expansion in Nigeria to the extent that over two million chow- paying passengers are flown within Nigeria annually. These include passengers flown into and out of Nigeria. further than 400 aircraft have been registered in Nigeria, sixty- percent of which are used for marketable operations. In addition, there’s several government possessed aircraft some of which are operated by the air force.

As important as one hundred aircraft movement are registered daily in and out of Murtala Muhammed Airport; and about same also operate in and out of Kano as well. therefore, the need for effective airlines to enhance social, profitable and political development of Nigeria can not be ignored.

description OF TERMS

When the following terms are used in the norms and recommended practice on Aviation/ Airline operations, they’ve the following meaning-.

1) Airline- As handed in Composition 96 of the convention, any air transport enterprise immolation or operating as schedule internal air service.

2) Airplane A power driven, heavier than air craft, inferring its lift in flight primarily from aerodynamic responses on shells which remain fixed under given conditions of flight.

3) Aircraft Any machine that can decide support in the atmosphere from the responses of the air other than the responses of the air against the earth’s face.

4) Aircraft Equipment Articles, other than stores and spare corridor of a removable nature for use on board an aircraft during flight, including first aid and survival outfit.

5) Authorized Agent A responsible person who represents an driver and who’s authorized by or on behalf of similar driver to act on all formalities connected with the entry and concurrence of the driver’s aircraft, crew, passengers, weight, correspondence, baggage or stores.

6) Baggage particular property of passengers or crew carried on an aircraft by agreement with the driver.

7) Cargo Any property carried on an aircraft other than correspondence, stores and baggage.

8) Crew Member A person assigned by an driver to duty on an aircraft during flight time.

9) Disembarkation The leaving of an aircraft after a wharf, except by crew or passengers continuing on the coming stage of the same through flight.

10) Embarkation The boarding of an aircraft for the purpose of commencing a flight, except by similar crew or passengers as have embarked on a former stage of the same through flight.

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