Determination of Structural Changes of Domestic Air Travel Demand in Nigeria

Abstract

This article investigates structural changes throughout time. Air demand is heavily influenced by fare and frequency. The focus of this research is primarily on structural alterations connected to these two elements. The idea that fare sensitivity has grown and frequency sensitivity has (roughly) reduced is explored in particular. It is critical to investigate the stability of the structure of air travel demand. Demand elasticities with these variables, as well as coefficient ratios, can be utilized to depict structural changes over time. While no particular temporal trends for scheduled flight time and fare impacts have been discovered, no structural changes relating to other factors have been discovered. From 2009 and 2013, we conducted paired sample t-tests for the important operational and economic factors of air travel demand, and there was no statistically significant variation in the parameter estimates. The ratios of frequency of flight and airline fares change over time, and all ratios of airlines have identical patterns- they rise or drop concurrently because frequency coefficients are more stable than pricing coefficients. Furthermore, changes in fare elasticities follow patterns comparable to changes in fare-to-frequency coefficient ratios. These adjustments are thus mostly driven by increases in fare sensitivity. This research provides a framework for airlines to evaluate demand on domestic routes and place their services by constructing a service positioning matrix to guarantee commercial sustainability.