Evaluating the Drivers of Airlines Profitability in Nigeria Domestic Network
Open Access
- 1 January 2022
- journal article
- research article
- Published by Scientific Research Publishing, Inc. in Journal of Transportation Technologies
- Vol. 12 (03), 369-387
- https://doi.org/10.4236/jtts.2022.123023
Abstract
A firm’s profitability is critical to its competitiveness and sustainability. This research looked at the elements that influence airline profitability in Nigeria. From 2005 to 2019, two airlines were picked, and their data were retrieved from Nigerian Civil Aviation Authority (NCAA). From estimated quarterly panel data using E-views 8 and SPSS 22, the overall findings of the regression study demonstrate that with ROA used as a proxy for profitability, the R-square is 83.6 per cent and 89.4 per cent, respectively for Aero contractors and Medview airline, representing 83.6 per cent and 89.4 per cent of the changes in profitability of the Aero contractors and Medview in the sample, respectively, could be explained by changes in the study’s independent variables, namely growth, liquidity, leverage, lease, tangibility, fuel cost and personnel cost. Besides the total of the explanatory variables, growth, leverage and tangibility are statically significant at a 5% level of significant Aero Contractors. Growth, leverage, leasing cost, fuel cost, and staff cost, on the other hand, are statistically significant at the 5% level of significance for Medview airlines. Profiteering, expansion, leverage, and tangibility are the primary activities of any airline firm. Lease cost, fuel cost, and staff cost show a statistically significant positive link with the profitability metric ROA. As a result, stakeholders of Nigerian airlines should prioritize profitability over other criteria in this study. Airline executives should do a comprehensive analysis of all potential elements impacting their company’s profitability in the literature, including aspects other than economic variables. According to the findings of this study, political issues account for a greater proportion of the reasons why airlines fail in Nigeria.Keywords
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