Posted by Sade Williams
The Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu, has said that all airlines must comply with regulations and standards in spite of the ticket fares.
Reacting to news that some domestic airlines have slashed fares on some routes, he said the decision by the airlines to so depend on the analyses that have done based on their finances.
According to him, the decision might out also be borne out of market analysis and excess capacity, among many factors, adding that such would be temporary decision as the market could force them readjusts afterwards.
‘’It is up to the airlines to do their 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.
‘’May be 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 if 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.’’. he said.
He however aid the NCAA is there to monitor the airlines on strict compliance to standards, adding that if there are signs of airlines cutting corners, the Authority will not hesitate to carry out a full economic audit of the airline.
‘’It is our responsibility to ensure they comply with all our standards and regulations and I don’t think any business 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 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.
‘’For us, if we sew trends or indications of them trying to cut corners, then we will do a full economic audit of the airline to ensure they comply with that. So far, there is nothing like that. There are many indications to show an airline has issues’’., he added.
