Industry stakeholders have been reacting to and sharing their opinions about a recent airfare slash undertaken by one of Nigeria’s domestic airlines. As expected, some specialists agree with the airfare slash, while others disagree with the move. It is with this backdrop that the Director General (DG) of the Nigerian Civil Aviation Authority (NCAA), Capt. Musa Nuhu shared his expert opinion pertaining to best industry practices expected of airlines on the matter.
According to sources, the DG disclosed that every airline is free to determine its marketing strategies, which include making the decision to cut airfares. This, he said, is mostly done for the most common reasons such as the desire to relate to a specific market segment or to take advantage of excess capacity.
Concerning the opinion expressed by some, that slashing airfares is disadvantageous to the airline concerned, as doing so will make the airline operate at a loss, the NCAA boss had this to say:
“I don’t think businesses will intentionally undercut themselves to the point they will not break even. I mean, let’s understand. These people have invested millions of dollars in their business. To me, it will be foolhardy to shoot yourself in the leg by cutting your airfares to the point that you are no longer profitable or able to break even. So, it is the airline that can decide, since it knows the internal workings, efficiencies and deficiencies that can really determine and explain the reduction in airfares.”
The DG however emphasized that the NCAA has a prerogative to ensure compliance with its regulations and standards – a goal which it meets by the execution of regular audits. Capt. Nuhu assured the public that no airlines are presently cutting corners. If, however, any are found doing so, he said, they will be submitted to a full economic audit.
