January 23, (THEWILL) – The Director General of the Nigerian Civil Aviation Authority (NCAA), Capt Musa Nuhu has stated that, there are many factors responsible for reduction in airfares, pointing out that, only airlines can explain the reasons behind their slashing of airfares.
Recently some domestic airlines have indulged in slashing their air tickets. Although, it is not certain why they are doing so, experts have opined that it is all about marketing strategy geared towards attracting passengers.
On the other hand, some experts are of the view that very low fares are pointers to cash flow challenges, insisting that an economic audit is necessary to ensure safety of passengers.
But in his reaction, Capt Nuhu said that it is up to the airlines to do its finances and economics and determine a reduction of airfares.
According to the DG, the airlines involved must have done their proper analyses to reduce those airfares, adding that there are many factors responsible and that only the airlines can explain the reasons behind their slashing of airfares.
Explaining further, Capt Nuhu said “maybe they have excess capacity and instead of leaving that excess capacity to go to waste, they rather make some money out of it. So there are many reasons. Airlines may slash their fares, maybe they want to relate to a particular market segment after which they will adjust their fares accordingly.”
Emphasising that airline finances and economics are interesting subjects, Nuhu opined that “many people are of the opinion that with such reduced fares they might not be able to break even and thus may embark on cutting corners.”
He, however, assured that it is the NCAA’s responsibility to ensure the airlines comply with all their standards and regulations, adding “I don’t think any business will intentionally under-cut themselves to the point that 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 break even. So, it is the airline that can decide and know the internal workings, efficiencies and deficiencies that can really determine and explain the reduction in airfares.”
According to Nuhu, the NCAA is alert to the situation and if they see trends or indications of the airlines trying to cut corners, then, the agency will do a full economic audit of the airline to ensure they comply with that.
Stating that the NCAA embarks on such audits often as required, Capt Nuhu said “So far, nothing. There are many indications to show an airline has issues.
On the International Civil Aviation Organisation (ICAO) audit, the DG assured that NCAA is working assiduously with all the agencies and that the audit is about safety audit on the oversight function of the NCAA.
He informed that, when ICAO comes, they look through NCAA books and see if their books are meeting ICAO standards and recommended practises.
“They will then go into the industry; they go to the Nigerian Airspace Management Agency (NAMA), Federal Airports Authority of Nigeria (FAAN) and also go to any selected airline to see whether we are actually complying with what we have in our books”, he said.
On progress made in terms of preparation for the audit, Capt Nuhu said “we have made significant progress and there is still some work to be done but we are working on it. We hope that in a couple of months before the audit, we will be fully ready; we have consultative meetings all the time with NAMA and FAAN. In the NCAA, we have our own internal meetings and this week, we are going to have a meeting with NAMA and NiMET on their preparations and we will have another meeting and feedback of progress before the end of the month with the agencies. In February, we will start with the industry, including the private sector. We select the airlines and carry them along on our preparations”, he said.
About the Author
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.
