Trend Analysis of the Operational Costs of Domestic Airlines in Nigeria

Alubankudi Oluwafikayo Ruth¹ , Akpudo Chijioke Udechukwu² , s Mobolaji Stephen³ , Nwachukwu Tochi C.⁴

Section:Research Paper, Product Type: Journal-Paper
Vol.11 , Issue.3 , pp.29-34, Sep-2023

Online published on Sep 30, 2023

Copyright © Alubankudi Oluwafikayo Ruth, Akpudo Chijioke Udechukwu, Stephens Mobolaji Stephen, Nwachukwu Tochi C. . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
Cost management practices are considered important for the sustainability of any business organization in modern society. The Nigerian domestic airlines have been facing an increase in operational costs, which may be a result of a lack of business processing. Based on the above assumption, this paper aims to analyze the operational costs of domestic airlines in Nigeria over a ten-year period. The specific objectives are to assess the cost center and determine the trend of operational costs for the Nigerian domestic airlines over a ten-year period. Therefore, the descriptive survey type of research design was used for the study. Both primary and secondary sources of data were employed. The population of the study was forty employees or senior staff of the selected Nigerian domestic airlines. The secondary data, which is data on operating costs for the selected airlines, was sourced from the databases of Arik Air, Air Peace, Overland Airways, and Dana Airlines for a period of ten years. Both Descriptive and Inferential methods of data analysis were employed for the analysis. The study revealed that aviation fuel is the major determinant in the cost center of Nigerian domestic airlines, followed by human resources and ground costs. The study also established that there is a steady increase in the cost of operations across all four airlines except in 2020, when the cost of operations declined due to the COVID-19 pandemic. The study recommends that airlines should share resources wherever possible and monitor venerable cost centers to remain sustainable.

Key-Words / Index Term :
Airlines, domestic airlines, operational cost, cost centers, Nigeria

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