The recent airfare slash by one of the domestic airlines led to a heated debate recently be some stakeholders.
Some say, it is an accepted norm globally, others disagreed saying, the airlines maybe having some financial issues.
They also alleged something maybe wrong that should be critical looked into by the regulatory agency.
This is not the first time domestic airlines in Nigeria will reduce airfares, all of them even the bigger airlines have engaged in this exercise.
Is this decision against the regulations? Is it true that this is a ploy by airlines to cover up their financial challenges?
In an interview, the Director General, Nigeria Civil Aviation Authority, NCAA, Captain Musa Nuhu says, it is not against the regulations or strange for airlines to slash their airfares.
According to Capt. Nuhu, “it is up to the airlines to do its finances and economics and determine a reduction of airfares and I believe these airlines have done their proper analyses to reduce those airfares and there are many factors, they only can explain the reasons behind their slashing of airfares”.
He gave reasons why some airlines take the decision to cut down on airfare.
“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.Airline finances and economics are interesting subjects and airlines have their reasons for doing that”.
While 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, the DG NCAA says, the regulatory body would never allow that to happen.
“It is our responsibility to ensure they comply with all our standards and regulations and I don’t think and business will intentionally under cut themselves to the point they will not break even, I mean, let’s understand, this people have invested millions of dollars in their business, to me, it will be fool hardy 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 knows the internal workings, efficiencies and deficiencies that can really determine and explain the reduction in airfares”.
Capt. Nuhu assured that, if they see trends or indications of them trying to cut corners, they will do a full economic audit of the airline to ensure they comply with that and so far nothing of such has been seen, adding that, the NCAA carryout economic audit on the airlines as often as required.
