EFFECTS OF ECONOMIC REGULATIONS ON DOMESTIC AIRLINES IN DEVELOPING COUNTRIES: A CASE STUDY OF NIGERIA

UHUEGHO,, K.O and NWOKOCHA,, F. M and OLANIYI,, T . K (2014) EFFECTS OF ECONOMIC REGULATIONS ON DOMESTIC AIRLINES IN DEVELOPING COUNTRIES: A CASE STUDY OF NIGERIA. International Conference on Science, Technology, Education, Arts, Management and Social Sciences.

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Abstract

This article describes the effects of Economic Regulation (ER) on domestic airlines in developing countries using Nigeria as case study. In recent times ER has received much attention in the developing countries as setbacks in airline industry are partly attributed to poor financial management despite the huge loosely monitored Government subventions in the form of bail outs. The regulatory mechanism for ER in t he airline industry emphasised non - financial qualitative metrics and cost variables whilst numerous financial ratios that guide industrial best practices globally received insignificant attention. Literatures confirmed that financial ratios are of outmost significance in evaluating airline solvency and they further provide objective basis for financial analysis, statistical inference, comparative and trend analysis. Two sets of structured interviews were administered to the NCAA and three (3) selected domes tic airlines to determine the extent of adoption of quantitative (financial ratios) in ER; regrettably, the inherent lack of quantitative data was evidenced. This article employed qualitative comparative analysis methodology to bridge the existing literatu re gaps. It developed a framework as benchmark for best industrial practices by utilising financial ratios to assess airline solvency. The results of the study conducted were used t o modify the existing body of knowledge, propose institutional change that are airline - specific and augment the holistic mechanism for ER of airlines in Nigeria inclusive of consideration of mergers and acquisitions that improves both scope and scale economies. Future work would include specific testing of the proposed framework in an airline environment with the objective of improving learning and dynamics of policy formulation in a complex air transport environmen

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