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PROJECT TOPIC AND MATERIAL ON MARKETING STRATEGIES AND BUSINESS PERFORMANCE OF DOMESTIC AIRLINES IN NIGERIA
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Marketing strategy embraces major fundamental components of marketing practice. Despite this importance, executives in Nigerian Aviation Industry have not been market driven as they lagged behind in adopting marketing concept and other promotional efforts in order to increase patronage. Today, only 15 million; 8.6 percent out of 174 million of Nigerian population travelled by air with its dire consequences of suffering from entropy, performance below capacity, inability to provide quality services, abysmal profit and lack of adequate implementation of direct marketing techniques. All these problems necessitated the need to evaluate the relationship between marketing strategies and business performance of domestic airlines in Nigerian Aviation Industry.
This study adopted survey research design. Target population comprised 488 staff of the selected airline and total enumeration method was adopted. Data was collected through the use of structured questionnaire titled:”Marketing Strategies and Business Performance Questionnaire” (MSBPQ) adapted and validated for the study. The Cronbach’s alpha coefficient for the constructs ranges between 0.76 and 0.97. The response rate was 83.4%. The data were analyzed using descriptive and inferential (Pearson Product moment correlation, regression analysis) statistics.
The analysis of the data revealed a moderate positive and significant relationship between Direct Marketing and Sales Growth (r= 0.422, p<0.05); Mouth to Mouth Marketing and Market Share (r= 0.270, p<0.05); and Online Marketing and Profitability (r=0.448, p<0.05). It also revealed that Traditional Marketing has positive significant effect on Working Capital (R2=.453, F(1, 406)= 336.370; p<0.05); Transactional Marketing influence Customer Satisfaction (R2=.309, p<0.05); and Marketing Strategies have significant effect on business performance (R2=.632, F(5, 402)= 181.336; p<0.05)
The study concluded that marketing strategies significantly influence business performance of Airline Operators in Nigeria The study recommended that Airline Industry should aggressively be market driven by adopting marketing concept; marketing strategies should be seen as an investment to improve business performance with a view to meet continuous and changing demand of customers; airline operators should interact with and respond to internal and external market factors so as to maintain equitable working balance among the interest groups.
Keywords: Marketing strategies, Business performance, Direct marketing, Profitability, Transaction marketing, Traditional marketing.
Word Count: 346
TABLE OF CONTENTS
Title Page i
Table of Contents vii
List of Tables xi
List of Figures xiii
List of Acronyms xiv
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of the Problem 7
1.3 Objective of the Study 11
1.4 Research Questions 11
1.5 Hypotheses and their Development 12
1.6 Significance of the Study 19
1.7 Scope of the Study 20
1.8 Operationalization of Variables 21
1.9 Operational Definition of Terms 22
1.10 Brief Historical Background of the domestic Airlines (Operators) 23
1.10.1 First Nation Airways 23
1.10.2 Med-View Airline 24
1.10.3 Overland Airways 24
1.10.4 Arik Air 25
1.10.5 Aero Contractors 25
1.10.6 Med-View Airways 26
1.10.7 Dana Air 26
CHAPTER TWO: REVIEW OF LITERATURE
2.1 Conceptual Review 28
2.1.1 Marketing 28
18.104.22.168 Marketing Strategy 30
22.214.171.124 Direct Marketing 32
126.96.36.199 Mouth-to-mouth Marketing 35
188.8.131.52 Online Marketing 37
184.108.40.206.1 Types of Online Marketing 38
220.127.116.11.2 Factors Working Against Adoption of Online Marketing by Consumers 39
18.104.22.168 Traditional Marketing 40
2.1.2 Business Performance 41
22.214.171.124 Sales Growth 44
126.96.36.199 Market Share 46
188.8.131.52 Profitability 48
184.108.40.206 Working Capital 50
220.127.116.11.1Determinants of Working Capital: 52
2.2 Theoretical Framework 55
2.2.1 Hierarchy of Effects Marketing Model 55
2.2.2 The Contingency Theory 57
2.2.3 Stakeholder Theory 59
2.2.4 Resource-based Theory 60
2.3 Empirical Review 63
2.3.1 Marketing Strategies 63
2.3.2 Business Performance 65
18.104.22.168 Sales Growth 67
22.214.171.124 Market Share 68
126.96.36.199 Profitability 69
188.8.131.52 Working Capital 70
184.108.40.206 Customers Satisfaction 71
2.3.3 Direct Marketing and Sales Growth 73
2.3.4 Mouth to Mouth Marketing and Market Share 74
2.3.5 Online Marketing and Profitability 76
2.3.6 Traditional Marketing and Working Capital 78
2.4 Summary and Gaps in Literature 89
2.5 Conceptual Model 82
CHAPTER THREE: METHODOLOGY
3.1 Research Design 83
3.2 Population 83
3.3 Sample size and sampling Technique 84
3.4 Method of Data Collection 85
3.4.1 Research Instrument 85
3.5 Pilot study 86
3.5.1 Validity of the Research Instrument 88
3.5.2 Reliability of the Research Instrument 88
3.6 Method of Data Analysis 89
3.6.1 Model Specification 90
3.7 Research Model 93
3.8 Ethical Consideration 94
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND
DISCUSSION OF FINDINGS
4.1 Response Rate 95
4.2 Descriptive Analysis of Demographic Information of the Respondents 96
4.3 Data Analysis, Interpretation and Discussion of Findings 98
- Restatement of Objective and Research Question One 98
- Restatement of Objective and Research Question Two 105
- Restatement of Objective and Research Question Three 112
- Restatement of Objective and Research Question Four 120
- Restatement of Objective and Research Question Five 127
- Restatement of Objective and Research Question Six 134
4.4 Summary of Hypothesis Testing Results 139
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction 140
5.1 Summary 140
5.2 Conclusion 142
5.3 Recommendations 143
5.4 Contribution to knowledge 144
5.4.1 Conceptual Contribution 144
5.4.2 Empirical Contribution 145
5.4.3 Theoretical Contribution 145
5.5.1 Implications for Marketing Practice 146
5.5.2 Implications for Policy Makers 148
220.127.116.11 The Market: 148
18.104.22.168 Target Market Affinity 148
22.214.171.124 Availability of Experienced Aviation Practitioners 149
126.96.36.199 Bilateral Air Services agreements 149
188.8.131.52 Yamoussoukro Decision 149
184.108.40.206 Cape Town Treaty 149
LIST OF TABLES
2.1: Primary and Selected Secondary Measures for Stakeholder Groups 43
3.1: Population of Airline Operators 84
3.2: Research Instrument 86
3.3: KMO and Bartlett Test for Each Variable in the Research Instrument 88
3.4 Reliability Table of Construct 89
3.5: A Priori Expectation 92
4.1: Rate of Response by the Respondents 95
4.2: Demographic and Firm Characteristics of the Respondents 96
Descriptive Analysis of Direct Marketing 98
4.4: Descriptive analysis on Sales Growth 100
4.5: Pearson Correlation Result on the Relationship between direct marketing and sales growth of selected airlines in Nigerian Aviation Industry 102
4.6: Descriptive Analysis on Mouth to Mouth Marketing 105
4.7. Descriptive analysis on Market Share 107
4.8: Pearson Correlation Coefficient for the relationship between mouth-to -mouth marketing and market share of selected airlines in Nigerian Aviation Industry 110
4.9: Descriptive Analysis on Online Marketing 113
4.10. Descriptive analysis of Profitability 114
Table 4.11: Pearson Correlation Coefficient for the relationship between online marketing and profitability of selected airlines in Nigerian Aviation Industry 115
Table 4.12.1: Summary of correlation coefficient between transactional marketing and
customer satisfaction of selected airline firms in Nigeria 116
Table 4.13. Descriptive Analysis on Traditional Marketing 120
Table 4.14 Descriptive analysis on Working Capital 121
Table 4.15: Model summary of traditional marketing and working capital of selected airline
airline firms in Nigeria Aviation Industry 123
Table 4.16: Descriptive Analysis on Transactional Marketing 127
Table 4.17 Descriptive analysis on Customer Satisfaction 128
Table 4.18: Pearson Correlation Coefficient for the relationship between transactional
marketing and customers’ satisfaction of selected airlines in Nigerian
Aviation Industry 130
Table 4.19.: Summary Results of Regression Analysis of Effect of Transactional Marketing on Customer Satisfaction of selected Airlines in Nigerian Aviation Industry 131
Table 4.20: Summary Results of Regression Analysis of Influence of online marketing, transactional marketing, mouth to mouth marketing, direct marketing and traditional marketing on business performance of selected airline firms in Nigeria Aviation Industry 135
Table 4.21: Summary of Hypotheses Results 139
LIST OF FIGURES
2.1 A practical Framework 61
2.2 Researcher’s Conceptual Model 82
3.1 Researcher’s Conceptual Model 93
LIST OF ACRONYMNS
IATA – International Air Transport Association 3
WATS – World Air Transport Statistics 3
ROI – Return on Investment 1
AMA – American Marketing Association 4
WOM – Word Of Mouth 35
FAAN – Federal Airports Authority of Nigeria 9
CBN – Central Bank of Nigeria 9
NCAA – Nigerian Civil Aviation Authority 20
NAMA – Nigerian Airspace Management Authority
AMCON- Assets Management Corporation of Nigeria 24
ADC – Aviation Development Company
NAF – Nigerian Airforce 25
CAT-1- Cartegory One
SSS – Safety, Schedule and Services 23
NAHCON – National Hajj Commission 24
1.1 Background to the Study
In the aviation industry where air travel business is highly competitive, marketing activities are inevitably vital to ensure competitive edge and most airlines are doing just about anything in order to remain relevant and still meet the ever dynamic needs of the passengers. Studies have shown that for these airlines to survive the competition in their industry, they need to take their marketing very seriously (Ibidunni, 2010). The global world of business today is a very dynamic one, in order to satisfy the changing needs of customers, organisations must first know their needs and ensure such needs are met with the services they provide (Smith and Reece, 2012). In the airline industry, passengers pay higher fares at airports for on-spot purchases where a single carrier controls a high fraction of traffic. For airlines to survive in today’s competitive market, it has to treat the marketing drive of its business with top priority to ensure adequate business performance.
Business performance has to do with the combination of management and analytic processes that allow managers of an organisation to achieve pre-determined goals in their business dealings. It is often set to align with the strategic and operational objectives of the organisation in question: In doing this, organisations find it easy to achieve their selected goals for the period (Makhbul, 2011). Measuring business performance in today’s economic environment is an important issue for practicing managers. Generally speaking, business performance is the operational ability to satisfy the desires of the company’s major shareholders, which is often assessed to measure the accomplishment of such organisation (Smith and Reece, 2012).
In today’s business dealings, an organisation’s ability to succeed or fail is largely a product of how best such organisation can satisfy its customers and this act places enormous task and responsibility by way of marketing on any organisation intending to excel at satisfying the customers and clients (Ibidunni, 2010). It starts with identifying accurately the needs of the customers/clients and deciding on how best to handle the products and services in order to satisfy the desires of all prospective buyers and sellers as the case may be. Some indicators employed in measuring business performance are profitability, market share, return on investment (ROI), working capital, sales growth and customer retention (Wood, 2006).
The primary focus of every airline business is to make profit and this is the primary duty of the marketing manager through its marketing department to formulate and implement policies and plans that will maximize the profit per unit of capital employed in the business (Oyekanmi, 2013). Profitability means a suitable price policy which in itself is influenced by cost and market situation factors. In all endeavors, consumer’s satisfaction must be seriously anticipated right from the onset as posited by (Falk, 2011). Profit is the result a business owner considers necessary to make running the business worthwhile, it is comparable to the next-best amount an organisation could earn doing another job. Apart from profitability, another factor that enhances business activities of firms is market share.
The market share of a business is mainly considered to be the unit or revenue of the market accounted for by such business. When nearly 200 senior marketing managers were surveyed, result shows that 67% affirmed they found the “dollar market share” metric very useful, and 61% saw that the “unit market share” as been very useful (Farris, Neil, Phillip and David, 2010). Market share is often monitored for signs of change in the competitive market, and it frequently drives strategic or tactical action (Farris, Neil, Phillip and David, 2010). This makes market share increment one of the important objectives of a business and it enhances sales growth on a long run.
Sales growth composed of the amount by which the average sales volume of a company’s products or services has grown, typically from year to year (Blois and Ramirez, 2012). The sales growth is often measured sequentially. Sequential growth deals with the Comparism of recent performance of an organisation with the period preceding it. For instance, when a monthly report states that an organisation experienced 5% sequential sales growth, it implies that recent sales have increased by 5% since the previous month (Blois and Ramirez, 2012). Also, the sales growth is closely linked to the working capital of such organisation.
Working capital is the financial metrics which represents operating liquidity available to a business (Black, 2015). It is a part of operating capital that is often calculated as current assets minus current liabilities. Working capital should be positive in order to allow firms the ability to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses (Black, 2015). Working capital is often managed with activities such as inventories, accounts receivable and payable, and cash.
In India, the airlines were responsible for a total of 79.5 million passengers on scheduled services, an increase of 1.8 per cent over 2014. Among the largest airline industry’s performance, Indian was among the world’s largest domestic markets that had the fastest domestic passenger growth in 2015 (World Air Transport Statistics (WATS), 2015). Meanwhile, airlines in Africa scored lowest in global industry performance rating for year 2015, particularly in the area of domestic passenger growth. A result recently released by The International Air Transport Association (IATA) showed that African airlines had only 2.2 per cent of the entire market share of passengers for the year under review (WATS, 2015).
Zografos, Andreatta, and Odoni (2013) see the ability of businesses to perform viably as one of the most important issues in both developed and developing countries. Air transportation in Nigeria like other African countries was a very important project that needed urgent establishment during the British colonial rule as the need to reach out to other Colonies including Nigeria by the British government became essential. However, that initial desire could not be sustained over a long period of time due to poor performance in its managerial roles (Akpoghomeh, 2010). Some of the challenges are increase of flight fares, flight cancellations, delays, poor-onboard services, poor customer relations, missing luggage’s, huge staff outlay (serving the purpose of its inception) and poor equipment maintenance and breakdowns (Daramola, 2007).
With reports of the varying degree of successes and failures recorded by airlines in Nigeria, it is imperative to attempt to carry out a detail study of the various marketing strategies being adopted by these airlines in carrying out their operations with a view to establishing the place of marketing in their business performances. Previous research indicates that several factors that influence business performance are professional background of the owners, their entrepreneurship capabilities and preferences, cultural and religious beliefs, inadequate marketing strategies, marketing research, as well as the technology and micro environment (Buttner, 2011; Makhbul, 2011). Marketing is one of the most important aspectsof any business and airlines are not an exception.
Marketing itself is an activity with a defined process used for creating, communicating, delivering, and exchanging offers that have attached values for customers, clients, partners, and society at large in exchange for money (American Marketing Association, 2013). Marketing in business setting entails the process of exchange which involves two parties, the buyer and seller. During the process of exchange, value is given up by one party to the other party receiving something of value as well. That is whyKotler & Connor (2013) defines marketing as a process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. According to American Marketing Association (AMA) (2013), marketing is a broader concept which entails the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational goals. The ability of marketing managers to ascertain the right marketing strategy to adopt in the organisation ensures the growth of sales, share and profitability of any organisation.
Marketing strategy in itself is the process of adapting the marketing mix elements to environmental factors (Mavondo, 2000). It evolves as a result of the interplay of the marketing mix elements and the environmental factors, which impact on these elements. It functions by determining the nature, strength, direction, and interaction between marketing mix elements and the environmental factors in a particular situation (Osuagwu, 2001). The marketing variants like the total quality management are mostly concerned with satisfying clients’ needs and wants beneficially. Developing and implementing efficient and effective marketing strategies which adopts relevant dimensions of the marketing concept involve the organic tasks of selecting a target market (customers/clients) in which to operate and developing an efficient and effective marketing ingredient combination. Marketing thought, with its practice, has been moving speedily into the service industry (Kotler and Connor, 1997). Literature, partly, centers on the discussion of whether physical product marketing is similar to, or different from, the marketing of service and concludes that the differences between physical product and service might be a matter of emphasis rather than of nature or kind (Creveling, 2010). Marketing is one of the salient and important organic functions which help to service organisations to meet their business challenges and achieve set goals and objectives (Kotler and Connor, 1997).
Marketing strategy give the avenue whereby organisations make use of their resources to achieve their set goals and objectives with less stress (Waithaka, Muturi and Nyabuto, 2014). Marketing strategy deals with the adapting of marketing mix elements to business environmental forces which involves examination of the marketing mix elements and the environmental factors (Li, Duan, Edwards and Kinman, 2010). Part of the functions of marketing strategy is to determine the nature, strength, direction, and interaction between the marketing mix-elements and the environmental factors in a particular situation (Jain and Punj, 2014).
To ensure the survival of an organisation, there must be in place a sound and robust marketing commitment on the part of sales personnel, when considering the subtle, unstable and seemingly hostile business environments in which contemporary airline business organisations operates, it calls for targeted marketing strategies which could be online, traditional, word of mouth or direct marketing which are tailored to meet the objective of the organisation. It becomes an important part of this study to assert that there is virtually no limit to the types of marketing strategies that a business can adopt. This is due to the fact that new concepts and designs are being discovered daily, and the biggest problem that a business owner will face is choosing which one will best suit his venture, online, offline or traditional, word-of-mouth, or direct marketing (Akinyele, 2010).
Direct marketing strategy is often used by several airline operators because they see it as a powerful tool to attract and keep both old and new customers. It is a successful way some organisations are using to generate huge sales from existing and new customers (Edmund, 2011). Airlines, just like other organizations, make use of direct marketing to provide physical marketing materials to consumers to communicate information about a product or services being marketed by the organisation (O’guinn, 2013). Direct marketing is a form of advertising which allows businesses effectively communicate directly to customers through several media such as, cell phone, email, website, online advertisements, database marketing, fliers, catalog distribution, promotional letters and targeted mail (Ayyadurai, 2013).
Word of mouth Marketing is seen as the most effective and powerful marketing strategy any company can employ (Lang and Hyde, 2013). The benefit of this strategy is that it can instantly turn a consumer into a regular paying customer. This type of strategy is a by-product of the traditional and online marketing strategies (Lang and Lawson, 2013). The consumers show satisfaction through their word of mouth marketing to their friends on what was provided in exchange for their patronage (Thomas, 2012). Because word of mouth marketing is placed on the shoulders of satisfied customers who then share this satisfaction with people who trust them, this trust is then transferred to the business.
Another marketing strategy examined in the course of the study is traditional marketing which also known as offline in marketing. In the past, traditional marketing used to be the only main focus for advertisers then, but now, it is no longer the same. This type of marketing strategy is seen in two groups namely; print, and collectively, electronics (Armstrong and Overton, 2010). It is still highly effective, relevant and consistently produces good results. Also, online marketing is another strategy which is seen as the newest and sometime perceived by many businesses as the most powerful, as it has opened diverse types of marketing strategies that have completely changed the face of marketing (Rappaport, 2009). While using online marketing, a business owner or marketing manager can find numerous methods to explore a new business idea. Some of these ideas include affiliate marketing, article marketing, social networking, and blogging. Affiliate marketing can take a similar form as print based traditional marketing by placing banner advertisements on websites, but can reach so many more people. Chekitan and Don (2013) posit that article marketing and blogging on the other hand allows for two strategies at the same time. They can both be used to promote any product or services directly, or can be used for driving traffic (customers) to a website for the same purpose. Rappaport (2009) observed that social networking is the online version of word of mouth marketing and has the ability to “personally touch” a huge number of people instantly with basically the touch of a button (mouse).
Marketing strategy development, planning and implementation process involves a lot, such as, managerial experience, it has a high level of uncertainty, it requires intensive business knowledge, with a broad strategic information needed for success, rigorous process involving decision making by organisational managers, placing emphasis on its unique strengths to ensure better customer value over a long period of time (Jain and Punj, 2014). It is somehow difficult for businesses to constantly realize efficient and effective marketing strategy (Li, Duan, Edwards and Kinman, 2010). This could be associated with unstable business environmental factors, which will then stand as a difficult task for organisational marketing strategists to decide which strategy is best suitable for achieving the set goal for the year. McDonald (2012) was of the opinion that many factors prevent organisational managers from designing and implementing efficient and effective marketing strategies. The fact is that environmental factors were seen as major issues drastically affecting the efficiency and effectiveness of managers in strategic marketing issues (McDonald, 2012). The marketing strategies of airline operators in Nigerian companies are expected to be adaptable to these environmental factors in order to achieve set business performance goals and objective in a long run, though it seems to have witnessed some form of corporate performance over the years which can be attributed to their district level of market share and more needs to be done on the adoption of effective marketing strategies to improve business performance.
1.2 Statement of the Problem
Air transport in Nigeria has been growing in relation to the Gross National Product (GNP) as it accounts for a large part of transport expenditure in the economy (Oyekanmi, 2013). The share of freight movement on a tonne per kilometer is small compared to other modes; airlines carry high value, perishable goods and provide emergency services that make them an important part of the total transport system. Its transport system helps to improve quality of life by broadening people’s leisure and cultural experiences with a wider choice of holiday destinations around the world and an affordable means to visit distant friends and relatives.
Effective direct marketing strategy has been classified as one of the fundamental key for the growth of any business organisation because no business can survive without the marketing or sales of its products or services. Extensive marketing has been recognized as the important factor for the sales growth of any business and not just funding or capital should be consider as the growth of a business (Waithaka, Mutiri and Nyabuto, 2014). For an enterprise to survive, it is very crucial to have effective sales strategies that will win over its competitors in the industry but most of the customers are cautious about the abuse of direct marketing and are always worried that they may become victims of fraud (Yen, Chen and Chen, 2008). Traditionally, executives in Nigeria aviation industries have not been market driven, they have lagged behind in accepting the marketing concept and have generally been slow in adopting promotional methods, product strategy and other marketing techniques (Uhuegho, Olaniyi and Nwokocha, 2014).
Over the years the airlines industry in Nigeria have been unable to grow, expand and be strong enough to attract more Nigerians to travel by air, and this has contributed to excess capacity (or performance below capacity) that leads to huge economic losses in terms of potential turnover of air travelers not captured as passengers by the airlines (Bankole, 2015). According to Asiegbu, Igwe, and Akekue-Alex (2012), many airlines have suffered entropy (such as oriented, Barnax, Concorde, ADC, Sossoliso airlines) and unable to provide the required service quality, some of these airlines experienced low patronage and abysmal profit margin; and eventually collapsed. The competitive nature of aviation industries in Nigeria today is posing serious problems to various airline companies due to the operations of Nigeria aviation industries in the volatile environments (Olujide, 2003; Aremu, 2006). These problems have been attributed to the lack of adequate implementation of direct marketing techniques.
Satisfied consumers will pass positive information to others while dissatisfied consumers will pass negative information about the products or services (Tucker, 2011; Vermeulen and Seegers, 2009; Jalilvand, Samiei, Dini, and Manzari, 2012, Dennis, Merrilees, Jayawardhena and Wright, 2009). Mouth to mouth marketing communications is a major indicator to the success of a marketing strategy for an organisation. For an organisation to successfully market its products or services, such organisation must communicate with its customers or target market (Louise van Scheers and Prinsloo, 2014). However, mouth to mouth marketing might be counterproductive. On the one hand, it has been seen as an influential marketing tool that might improve firm’s market share and profitability (Arndt, 2009; Sheth,2000 and Guillermo, 2011); On the other hand, when the message about the firms’ services or product is negative, it may cause worst damage to the organisational objective of controlling the market, this has been seen to have greatly affected the airline industry (Richins, 1983; Hogan, Lemon and Libai, 2002; Guillermo, 2011).
Since the early 1990s, the delivery of a high level of service quality by airline companies became a marketing requisite as the competitive pressures continued to increase. Most airlines began to offer various incentives, such as the frequent flyer programmes in an effort to build and maintain the loyalty of customers (Miller, 2015). Thus, in order to remain competitive, service providers must render quality service to their customers. However, Ott (1993), in his extensive study of frequent fliers, showed that despite the airlines attempts to differentiate their services, consumers did not perceive any difference between one carrier and another, whereas Ostrowski, O’Brien, and Gordon (1993) noted that when all airline companies had comparable fares and matching frequent flyer programmes, companies with better perceived services drew customers from other carriers. Oghojafor and Alaneme (2014) added that Nigerian aviation industry is fraught with poor customer service and compensation for wronged and deserving customers. It has been observed that there is a need for more competition in the industry to give customers a wider range of choices in case their chosen carrier disappoints in any way (Udoh, 2013). In terms of customer satisfaction with the way the airlines handle the comfort of their passengers, there is little to reflect the Category one (CAT one) certification. In view of the challenge, much attention has been given to the role of mouth-to-mouth marketing. The lack of mouth-to-mouth marketing strategy negatively affects market share of the airline service providers in Nigeria (Udo, 2013). Bassey and Anyadighibe (2014) further explained that airline companies have not enjoyed the power of mouth-mouth marketing. Hence, the needs to further investigate how best effective marketing like mouth-to-mouth marketing could be used to enhance their business performance.
It is obvious that online marketing and its relevance in tourism industry, manufacturing industry, banking industry etc have engrossed the attention of many authors in developed, emerging and developing nations. Many scholars have examined the relationship between online marketing and business performance and yet general conclusion on the effect of online marketing on business performance are yet to be reached. Past studies present conflicting findings as some found a positive effect between the two (Sunny, Kim and Jeong, 2004; Ulhas, 2007; Salwani, Marthandan, Norzaidi and Chong, 2009 and among others) and some found no effect (Kirvijavi and Saarinen, 1995; Powell and Dent-Micallef, 1997; Lo and Darma, 2000; Singh and Pandey, 2008; Shin, 2006; Matikiti and Afolabi, 2012 and among others). This indicates that the effect of online marketing on business performance is still debatable.
The aviation industry has not been left behind in adopting e-marketing, as it is evident from numerous airline firms that have established their presence on the Internet. However, it is not yet clear whether the spread and utilization of Internet marketing has improved the profitability of the airlines firms in Nigeria (IATA, 2007).
A study carried out by Uhuegho, Olaniyi and Nwokocha (2014) revealed that most airlines operators in Nigeria are facing financial exigencies as a result of inability to locate target customers and secure passengers’ loyalty, the global trade trends, consumer protection and passenger rights, lack of online marketing amongst others. All these have impacted negatively on the nature of airline operations and their profitability. The study further showed that the Nigerian aviation industry was heavily indebted because of losses caused by low fares, high interest rates, and rising fuel costs. In 2010 alone, Nigerian airlines owed a combined $59.5 million to Federal Airport Authority of Nigeria (FAAN) as at when the Central Bank of Nigeria (CBN) announced a $1.2 billion bail-out for domestic carriers. In 2011, the airlines owed $66.7 million (10 billion naira) to Nigerian aviation agencies. Of the 150 active Nigerian airlines in 2001, the number declined to 19 in 2011 and 8 in 2016 mainly due to financial mismanagement and airline failures to meet industry policies. It is apparent that Nigerian airline firms are adopting online marketing but it is not yet clear whether the spread and utilization of online marketing has improved the profitability of airline firms in the Nigeria aviation industry.
Marketing is the connection between the satisfaction of the need of a society and its industrial activities which then support a firm to survive within its competitive environment. The airline industry is considered to be of strategic importance in every nation and it requires appropriate positioning to ensure its sustainability. Across the world, for instance, over 2.1 billion passengers travelled by air in 2006 (IATA, 2007). In Africa, the airlines generated 6.7 million jobs and contributed US$67.8 billion to the GDP (Air Transport Action Group, 2010). The Nigerian aviation industry is confronted by myriad of challenges in terms of traditional marketing which have threatened the day to day working capital and sales revenue of the firms. The airline industry in Nigeria has been having some traditional marketing challenges in the light of upsurge in competition and the dynamics in the global and local business environments (Air Transport Action Group, 2010). According to Adeniran, Egwuonwu and Egwuonwu (2015), most of the airlines in Nigeria do not have clearly stated positioning statements to differentiate their market offerings, and attract customers. This situation has resulted in high working capital and rates of airlines’ insolvency. Also, Nthiga (2008) noted that most firms do not use marketing to improve their organisational working capital. In the context of working capital it has been pragmatic that the difference of current assets and liabilities, organisational savings, and lack of legal structure are the major indicators to determine working capital of an organisationon the significant impact of traditional marketing in improving the day to day sales revenue of the organisation. Based on these problems, it is important to establish the relationship that exist between traditional marketing, transactional marketing, marketing strategies and selected performance indices of airline firms in Nigerian aviation industry
Based on the foregoing, the present study examined marketing strategies and business performance of selected airlines in Nigerian Aviation Industry.
1.3 Objective of the Study
The general objective of the study was to examine the relationship between marketing strategies and business performance of the selected airlines in Nigerian Aviation Industry. The specific objectives are to:
- determine the relationship between direct marketing and sales growth of selected airlines in Nigerian Aviation Industry;
- examine the relationship between mouth-to-mouth marketing and market share of the selected airlines in Nigerian Aviation Industry;
- assess the influence of online marketing on the profitability of the selected airlines in Nigerian Aviation Industry;
- aascertain the effect of traditional marketing on working capital of the selected airlines in Nigerian Aviation Industry;
- examine the influence of transaction marketing on customers’ satisfaction of the selected airline firms in Nigerian aviation industry and
- evaluate the influence of marketing strategies and business performance of the selected airline firms in Nigerian aviation industry;
1.4 Research Questions
To guide the conduct of this research the following questions were raised:
- What is the relationship between direct marketing and sales growth of the selected airlines in Nigerian Aviation Industry?
- What is the relationship between mouth-to-mouth marketing and market share of the selected airlines in Nigerian Aviation Industry?
- How does online marketing influence the profitability of the selected airlines in Nigerian Aviation Industry?
- In what way will traditional marketing affect working capital of the selected airlines in Nigerian Aviation Industry?
- What influence does transaction marketing have on customers’ satisfaction of the selected airline firms in Nigerian aviation industry?
- How do marketing strategies influence business performance of the selected airline firms in Nigerian aviation industry?
The following hypotheses were propounded and tested at 0.05 level significant:
H01: There is no significant relationship between direct marketing and sales growth of the selected airlines in Nigerian Aviation Industry.
H02: There is no significant relationship between mouth-to-mouth marketing and market share of the selected airlines in Nigerian Aviation Industry.
H03: Online marketing has no significant influence on the profitability of the selected airlines in Nigerian Aviation Industry.
H04: Traditional marketing has no significant effect on working capital of the selected airlines in Nigerian Aviation Industry.
H05: Transaction marketing does not significantly influence customers’ satisfaction of the selected airline firms in Nigerian aviation industry.
H06: Marketing strategies do not significantly influence business performance of the selected airline firms in Nigerian aviation industry.
Rationale for Hypotheses
H01: There is no significant relationship between direct marketing and sales growth of the domestic airlines in the development of Nigerian Aviation Industry.
Direct marketing is a form of advertising which allows businesses and nonprofit organisations to communicate directly to customers through a variety of media including cell phonetext messaging, email, websites, online adverts, database marketing, fliers, catalog distribution, promotional letters and targeted television, newspaper and magazine advertisements as well as outdoor advertising. Among practitioners, it is also known as direct response. Direct marketing is attractive to many marketers because its positive results can be measured directly. While many marketers recognize the financial benefits of increasing targeted awareness, some direct marketing efforts using particular media have been criticized for generating poor quality leads, either due to poor message strategy or because of poorly compiled demographic databases. Through conducting an empirical research, Gustafsson (2006) confirm that direct marketing has a significant positive effect on patronage of airline service firms in China and is essential for the successful delivery of customer services.
Chang and Yeh (2012) found that direct marketing is necessary for evaluating airlines’ services. By collecting surveys from inbound air passengers at Macao International Airport, Chan, Wang, Li, Liu, and Lam (2014) have employed the SERVQUAL model in completing a comparative study of different competitive advantages between traditional and low-cost airlines. Their findings clearly show that different marketing and service delivery strategies should be applied by different airlines (traditional vs. low-cost) in order for them to respectively and satisfactorily meet their different service quality dimensional needs of customers. Lázaro (2016) asserts that airlines that have introduced direct marketing can offer products and services calibrated to passengers’ needs. Norm (2011) found out that direct marketing has greater implication on sales growth and it is a sales channel through which customers are offered products and services. Bellman, Potter, Hassard, Robinson and Varan (2011) agree that direct marketing is a promotional tool for generating notoriety and a positive brand image.
However, authors such as MMA (2011) and García (2012) did not find positive relationship between direct marketing and sales revenue. They found that some direct marketing tools could not contribute value to user management, information, and resolution in an automatic and interactive manner. Costa, Barragáns and Rey (2012) do not see direct marketing as a sales outlet, where distribution is the entrance door that allows for the sale of business products and services. In the light of these previous findings, this study hypothesize that there is no significant relationship between direct marketing and sales growth of selected airlines in Nigerian Aviation Industry.
H02: There is no significant relationship between mouth-to-mouth marketing and market share of thedomestic airlines in Nigerian Aviation Industry
Passengers essentially need information about an airline company and its services to choose it. They always collect information from the mass media including television, radio, internet, etc. Although the mentioned resources provide valuable information, passengers prefer to receive a huge part of their information from informal resources such as their relatives, their friends, their acquaintances and other people (Silverman, 2001). Since they are not interested people, they are more noticed by the passengers. It must be mentioned that the formation of positive words of mouth about a service company can be due to different factors and will also have remarkable outcomes. In an environment where there has been a reduction in consumer’s trust as well as a decrease in television, radio and outdoor advertising, word of mouth offers a way to obtain a significant competitive advantage (International Word of Mouth Marketing Conference, 2005).
Recent studies in the field of different service industries have proved positive and negative effects of words of mouth on purchasing the services provided by service companies in different industries. Most airlines began to offer various incentives, such as the frequent flyer programmes, in an effort to build and maintain the loyalty of customers (Miller, 2015). Yasvari, Ghassemi, and Rahrovy (2012) assert that word of mouth is more important in final stages of the purchase process, because it assures the consumer. Alire (2007) in a study empirically found out that 90% of people trust the products or services confirmed by one of the family members, friends or colleagues, because they are not sure of any benefit. A study by Bughin, Doogan, and Vetvik (2010) suggest that word of mouth is the primary factor behind 20 to 50% of all purchasing decisions and generates more than twice the sales of paid advertising.
Cronin and Taylor (2012) found empirical support for the idea that mouth-to-mouth marketing led to increased market share and argued that service quality was actually an antecedent of market share. O‘Neill, Palmer, and Charters (2012) conducted a study about airlines services in Australia and found that when the belief leaders returned back to their country, they talked about their experiences and their verbal recommendations led to the increase in the sale of local airline services. Conducting a study in the US, Litvin, Blose, and Laird (2011) found that choosing airline by tourists was affected by verbal recommendations of the belief leaders and interestingly, a number of these choices were affected by the formal media. Brown, Barry, Dacin, and Gunst (2015) in their empirical study on word of mouth facets in restaurants confirmed that there is a strong relationship between word of mouth and customer’s loyalty. The researchers found out that positive word of mouth was directly correlated to customer’s repeated purchase which transformed into higher market share. They also discovered that the effect of positive or negative word of mouth on market share differed substantially from industry to industry.
Mackinsey group in 2009 reported that in the airline industry, the pass on rates for the key positive and negative word of mouth can reduce a firm’s market share by 20%, all other things being equal. Heriyati and Siek (2011) study showed that market share of low cost carriers did not significantly improve after receiving information through WOM channel because passengers find it difficult to make a decision about choices of services or when they are about to travel. From these arguments and findings, it is hypothesize that there is no significant relationship between mouth-to-mouth marketing and market share of selected airlines in Nigerian Aviation Industry.
H03: Online marketing has no significant influence on the profitability of the selected airlines in Nigerian Aviation Industry
According to Lerrthaitrakul and Panjakajornsak (2014), the aviation industries play a significant role in generating new marketing and business across the world. In order to survive in the modern marketplace, air-travel businesses need to give consumers what they want, which is low prices and a wide choice. Online marketing affords them a way to do that. Through the online platform, Airlines enhance their relationship with their passengers who will book directly with the airline rather than through travel agents. In addition, airlines increase their revenues through sales of optional services such as baggage, seat assignments and also ancillary services such as car-hire, hotels and insurance. Online marketing enables airlines to offer more services to customers, more channels to deliver their business, more intelligence to understand their business, greater efficiency and lower cost. De Alarcon, Molina, and Feliz (2005) in a study found that the actual cost per transaction goes down considerably with online marketing as opposed to traditional marketing.
Stroehle (2008) revealed that the application of online marketing in the airline industry is influential on the improvement of the effectiveness of marketing activities. Eid (2011) studied the use of online marketing in business management and concluded that the use of online marketing mechanisms is effective on market share and profitability of the companies. Jawabreh, Allahham, Alrjoub, and Ahmad (2012) explored the impact of Information Technology on Profitability of Airlines Industry on Royal Jordanian Airlines. The data were collected from the financial statements of Royal Jordanian Airlines and analyzed by using financial and statistical tools. From this study, it showed that some ratios showed good results and the airline still had the opportunity to improve effectively its financial performance and long term and short term solvency in future.
However, some studies have found no relationship between online marketing and firm’s profitability (Ozituran & Roney, 2003; Shin, 2006). Wen (2009) pointed out that the Internet had negative impacts on the industry, namely online pricing transparency, price competition and a decrease in customer loyalty. Xiang, Wang, O’Leary and Fesenmaier (2015) found that there has been no significant change from 2007 to 2012 in the percentage of American travellers who used the Internet as a source of information for trip planning. This situation clearly indicates that some people regard the Internet as having barriers that are difficult for them to overcome (Minghetti & Buhalis, 2010). On the other hand, people prefer to use a travel agent for a variety of reasons. The most recent figures of the Travel Weekly’s Consumer Trends (Tunney, 2014: C10) indicate that 45% of travellers have used a travel agent to book a trip with a large proportion of these travelers stating that they use a travel agent because they were looking for expert advice. The figure of 45% clearly indicates the relevance of travel agents in the travel and tourism today. Pan and Fesenmaier (2006) revealed that travel-related websites are not as user-friendly as they could be. Stoltz (2009) argue that users often get frustrated when trying to book online, even CEOs of online travel portal companies. In the light of these previous findings, this study proposes that online marketing has no significant influence on the profitability of selected airlines in Nigerian Aviation Industry.
H04: Traditional marketing has no significant effect on working capital of the selected airlines in Nigerian Aviation Industry
Empirical research has shown direct relationship between traditional marketing and working capital airlines companies. Traditional media such as television, direct mail, and e-mail have remained steady influencers for consumers in making choices of airline companies (“Word of Mouth Influences”, 2008). In 2008, 88.9% of consumers watched television weekly, 77.9% read advertisements they received in the mail, and 70.2% listened to the radio displaying a heavy exposure to traditional media advertising (“Word of Mouth Influences”, 2008). Kendirli and Kaya (2016) evaluated the working capital in airline companies listed on Istanbul Stock Exchange (BIST). The authors examined the relationship between working capital and profitability of Turkish Airlines Inc. and Pegasus Airlines Inc. which are traded between 2009 and 2013 (five years). The data were obtained from the financial statements between the years 2009-2013. The accounts receivable turnover (days), inventory turnover (days), net working capital turnover rate, and return on assets indicators were used to measure the effectiveness of the working capital management. The authors discovered a negative relationship between working capital and liquidity of the airlines sampled. The negative value of the net working capital shows the liquidity problem that come into prominence. The study also revealed that the airline companies managed working capital effectively and indicated a tendency to increase their profitability. Awunyo-Victor, Ayimey and Gayibor (2013) in their study found out that traditional marketing media enable companies to achieve their strategic marketing objectives some of which are to introduce new products, to induce present customers to buy more, to combat competition and to increase retail inventory for higher sales.
Some scholars have found that traditional marketing have negative impact on working capital by unnecessarily increasing firms operating expenses. Varun (2015) conducted a study on Working Capital Management of Aviation Industry with Specific Reference to Spicejet Airlines. The study analyzes the efficiency of working capital management of the company. The study found out that lack of management of working capital negatively affects the liquidity and the profitability of the corporate firm and consequently the net worth of the companies. The working capital is not satisfactory. Rajesh (2012) studies the challenges of Indian Aviation Industry in chaotic phase.
The study discusses and reviews the challenges faced by aviation companies such as shortage of workers and professionals, safety concerns, declining returns and the lack of accompanying capacity and infrastructure. Stiff competition and rising fuel costs are also negatively impacting the industry. The findings indicate that the growth in the aviation sector and capacity expansion by carriers have posed challengeson several fronts. Tesfaye (2012) found out that traditional marketing is more of product-centric and advertising based which give focus to the customer. It involves slow process of communication and transaction, has a one size fits all approach of marketing message, and requires very huge advertisement budget. Thus the study hypothesizes that traditional marketing has no significant effect on working capital of selected airlines in Nigerian Aviation Industry.
H05: Transaction marketing do not significantly influence customers’ satisfaction of the domestic airline firms in Nigerian aviation industry
H06: Marketing strategies do not significantly influence business performance of the domestic airline firms in Nigerian aviation industry
According to Suhartanto and Noor (2012), customer satisfaction is one of the objectives of marketing activity linking the process of purchasing and consumption with post purchase phenomena. Kotler and Armstrong (2004) posit that satisfying customers is an important element in marketing concept, as it affects future consumer purchase behaviour, profitability and shareholder value (Chitty, Ward, & Chua, 2007). Some researchers have discovered positive relationship between transactional marketing and customers’ satisfaction. Oghojafor, Ladipo, Ighomereho and Odunewu (2014) studies the determinants of customer satisfaction and loyalty in the Nigerian telecommunications industry. The main purpose of the study was to examine the marketing activities that influence customer satisfaction and the factors that determine customer loyalty in the industry. The results revealed that transactional marketing, product (core service), promotion and distribution had a higher impact on the level of customer satisfaction. It was also found that, apart from customer satisfaction, transactional marketing was a major determinant of customer loyalty in the telecoms market.
Suhartanto and Noor (2012) explore customer satisfaction in the airline industry: the role of service quality and price. Using self-administered questionnaires and 400 respondent data (200 data from each airline) collected using incidental sampling method from Jakarta and Bandung. The results of data analysis show that, in overall, full service airline customers are more satisfied than that of the low cost airline customers. Further, results on low cost airline data show that the promptness and accuracy of service, employee attitudes, and price significantly influence customer satisfaction. While in full service airline physical evidence, the attitude of employees, and the transactional marketing strategy are significant predictors of customer satisfaction. This study underlines that the service quality especially the service employees’ attitudes and price are factors that should be given more attention for developing customer satisfaction in both types of airlines, although their competitive strategy and target market are different.
However, other researchers have discovered negative effect of traditional marketing on customers’ satisfaction. Kumudha and Amalendu (2016) investigated customer relationship management and marketing practices in airlines industry. The study analyzed the expectations and perceptions of the customers and also gauged the effectiveness of the CRM practices adopted by the airline companies. The result revealed that the airline companies operating from Coimbatore had not been giving equal importance to different strategies like transactional marketing. The findings also showed that airline companies with large number of satisfied customers have more importance to customer loyalty strategy for converting the satisfied customers into loyal customers. The following is thus hypothesized: transaction marketing do not significantly influence customers’ satisfaction of selected airline firms in Nigerian aviation industry.
1.6 Significance of the Study
Every research carried out in our world today is set to meet the need of existing or future readers. Hence, the present study is beneficial in the following ways:
The outcome of this research would add to the existing knowledge on the need to adopt working marketing strategies to enhance business performance among Airline operators in Nigeria. Research were carried out in developed and developing part of the world like USA, South Africa, Europe and Nigeria among others with focus on SMEs, manufacturing and Education firms. Some of the studies found that effective marketing strategies enhanceorganisational performance in terms of profitability, turn-over, return on investment and shareholders’ equity. The present study was carried out in Lagos,Kano, Abuja, Port Harcourt,Owerri and Enugu similar result was recorded when employees of airline under study were examined.
To other organisations:
The result of this study would serve as a reminder to other airlines and firms outside aviation industry on the need to be more selective of the marketing strategy that suites their company’s product and service since its has the power to improve their business performance in both short and long term period. The very impact and relationship of marketing strategies indicators and business performance indicators under the study were examined to ensure that lapses are covered for future survival of airline and other businesses alike.
Government/Economic policy decision makers:
There is need for government establishments and economic policy decision makers to leverage on the result of this research to re-position their policies that affects business performance of companies in Nigeria so as to avoid future failures. Both the economic policy decision makers and the management team of government establishment would get to understand better the need to acquire adequate marketing strategic knowledge and its improvement on business performance to boast the economy at large.
The outcome of this study would be applicable to other developing countries in the southern part of the world as most of the environmental conditions precedent to marketing strategies and business performance are similar. This study will bring foreign direct investment into Nigeria as the study will reveal market gap and capacity under- utilization of Nigerian airspace presently at 8% use based on passenger of 15m according to FAAN (2014)
The present study should serve as a guide to upcoming researcher in the field of business administration with concentration on marketing strategies and business performance especially in the aviation industry. There has been a dearth in several studies carried out globally in the literature, but many unexplored areas were observed in the area of market orientation and its relation to business performance. The present study will give a direction to researchers towards the accomplishment of the gaps identified in the course of this study and further recommendations on future studies to improve on the present study.
1.7 Scope of the Study
The present study focused on marketing strategies (Independent variable) and business performance (Dependent variable) among airlines in the Nigerian Aviation industry focusing in Lagos State, Nigeria. The research study was carried out in Lagos metropolitan city, Kano, Abuja, Port Harcourt, Owerri and Enugu which shows national geographical spread and not limited to the head office of the selected airlines. NCAA (2016) in her bulletin says, Arik controls 55% of domestic passenger traffic, Aerocontractors- 15%, Air Peace – 15%, FirstNation Airways, Medview Airline Limited and Overland Airways controls 10%. All selected airlines controls 95% of domestic passengers in Nigerian airports with employees amounting to 488 employees.
This study made use of survey research design which is aimed at obtaining information from the respondents currently on what exists. The researcher aimed to get the opinion of all the departments in the airlines excluding cleaners, security and janitors, whose knowledge of the subject matter may be insufficient to provide valid responses.
The study choice of major Nigerian airports is due to the fact that the study can have national acceptability and secondly, the research finding can be useful based on its adaptability in other African and developing countries.
1.8 Operationalization of Variables
The predictor variable in this research was Marketing Strategies (X), while Business Performance is the predicted variable (Y). From the study of the variables, the following mathematical relationship is derived:
Y = f (X)
Y = Business Performance (BP)
X = Marketing Strategies (MS)
Y = (y1, y2, y3, y4, y5)
y1 = Sales growth (SG)
y2 = Market Share (MS)
y3 = Profitability (P)
y4 = Working Capital (WC)
y5 = Customer Satisfaction (CS)
X = (x1, x2, x3, x4, x5)
x1 = Direct Marketing (DM)
x2 = Mouth-to-mouth Marketing (MTM)
x3 = Online Marketing (OM)
x4 = Traditional Marketing (TRADM)
x5 = Transactional Marketing (TRANMs)
The formulated representing each of the hypotheses is as follows:
y1 = α0 + β1x1 + ei …………………………….……………………… eq (i)
y2 = α0 + β2x2 + ei …………………………….……………………… eq (ii)
y3 = α0 + β3x3 + ei …………………………………………………… eq (iii)
y4 = α0 + β4x4 + ei …………………………………………………… eq (iv)
y5 = α0 + β5x5 + ei …………………………………………………… eq (v)
Y = α0 + β1x1 + β2x2+ β3x3+ β4x4+ β5x5 + ei………………………… eq (vi)
α0 = Constant Term
β1 – β5 = Parameters to be estimated
ei = Error term
The study is to evaluate equations i – v
1.9 Operational Definition of Terms
Business Performance: Is a combination of management and analytic processes that allows managers of an organisation to achieve pre-determined goals
Sales Growth: The increase in a company’s sales over a particular period of time, usually given as a percentage
Market Share:The portion of market controlled by a particular airline operator in the aviation industry
Profitability:is the primary goal of all business ventures which is measured with income and expenses.
Marketing Strategy:It is a short and long term activities in the field of marketing which entails the analysis of the strategic initial situation of a company and the formation, evaluation and selection of market-oriented strategies.
Direct Marketing:when a business sells products or services directly to the public through mail order or telephone selling, rather than through retailers.
Mouth-to-mouth Marketing: isan unpaid form of promotion in which satisfied customers tell other people how much they like a business, product or service
Online Marketing: The promotion and advertisement of a company’s products, services or brand on the internet.
Customer satisfaction: is a consumer’s response to the evaluation of the perceived discrepancy between prior expectation and the actual performance of the product as perceived after its consumption.
Traditional Marketing: any type of promotion, advertising or campaign that has been in use by companies for years and that has a proven success rate. Methods of traditional marketing can include print advertisements, such as newsletters, billboards, flyers and newspaper print ads.
Airline: an organisation providing a regular public service of air transportation on one or more routes
Aviation Industry: is the business sector dedicated to manufacturing and operating all types of aircraft.
1.10 Brief Historical Background of the Selected Airlines (Operators)
1.10.1 FirstNation Airways
FirstNation Airways (SS) Limited is a passenger Airline based in Lagos-Nigeria. First Nation Airways was formed in April 2011 by former staff members of the now defunct Bellview Airlines. The airline began operations in April 2011. The Airline currently operates fleet of Modern Airbus A319 aircraft. Service is currently provided on domestic routes within Nigeria and have expanded to other Cities within Africa. The management is made up of some of the most talented professionals in the airline industry.
The airline operates using the three ‘SSS’ principle, of SAFETY SCHELDULE and SERVICE providing world class, safe, reliable service and delivering good passenger experience on each and every flight both on ground and in-flight.
1.10.2 Med-View Airline
Med-View Airline is an airline based in Lagos, Nigeria. The airline was founded in 2007 as a charter airline, mainly operating Hajj flights, and has offered domestic passenger services since November 2012. The airline undertook to provide rescue operations for pilgrims stranded in Ilorin, Lagos, Sokoto, Maiduguri and Yola, as part of an operation controlled by the authorities of the National Hajj commission (NAHCON). It has since expanded into regional and long-haul scheduled passenger routes. Med-View Airline Plc was listed on the Nigerian Stock Exchange on January 31, 2017. Med-View Airline operates to eight domestic and three international scheduled destinations in four countries across Nigeria, West Africa, Europe and the Middle East (as of 22 February 2015). The Med-View Airline fleet includes the following aircraft: Boeing 737-400, Boeing 737-500, Boeing 737-800, Boeing 747-400, Boeing 767-300ER, and Boeing 777-200ER. The airline offers passengers a comfortable in-flight experience. Medview is able to meet with high airline industry standards by partnering with various airlines. These partnerships provide passengers with better airfares and routes. Currently, Medview is in partnership with the following: Euro Atlantic Airways (Lisbon, Portugal); Saudi Air Cargo (this is a general sales agency agreement); Pluna Air (Uruguay); and Air Atlanta (Iceland).
1.10.3 Overland Airways
Overland Airways is an airline based in Ikeja, Lagos State. Its main base is Murtala Muhammed International Airport, Ikeja, with a hub at Nnamdi Azikiwe International Airport, Abuja. Overland Airways was incorporated on September 17, 1998. It is an airline registered to operate charter and scheduled flights. The airline commenced operations in 2002 with the aim of increasing the prosperity of the Nigerian hinterland by facilitating the transportation of business men, investors, government officials and indigenes from one point to another and till date, is the pride of Nigeria in the airline industry.
Overland Airways operates scheduled domestic flight services within Nigeria called ‘Business Flyer” and has succeeded in bringing air transportation to the hinterland of Nigeria. Its routes include: Lagos, Abuja, Ibadan, Ilorin, Akure, Dutse, Minna, Bauchi, Asaba and Jalingo. Overland Airways also operates charter services to various destinations in Nigeria, West and Central Africa. This contributed to the economic growth of host states by connecting them essentially to Abuja and Lagos, the main economic hubs of the country. The airline operates a fleet of modern equipment and facilities to provide high standard of service. Overland Airways has a fleet of 9 modern aircraft composed of ATR-42s, ATR-72s and Beechcraft 1900Ds to various destinations in Nigeria, West and Central Africa. Overland Airways is the only airline older than 6 years in existence in Nigeria today not taken over by the Asset Management Corporation of Nigeria (AMCON), Overland Airways has the economic stability to continue to empower Nigeria’s hinterland economies with sustainable, safe and comfortable flight services. Overland Airways has been recognized as the fastest growing domestic airline in Nigeria amongst other industry awards that she has received since inception. The airline is an International Air Transport Association (IATA) Member; having successfully completed the IATA Operational Safety Audit (IOSA). It is also listed on the IOSA Registry, which is a global standard for airlines and a benchmark for enhancing operational safety of airlines.
1.10.4 Arik Air
Arik Air is a Nigerianairline established in year 2002, operating mainly from two hubs at Murtala Muhammed International Airport near Lagos and Nnamdi Azikiwe International Airport in Abuja. Arik Air’s head office is the Arik Air Aviation Center on the grounds of Murtala Muhammed International Airport in Ikeja. Arik Air serves a network of regional and mid-haul destinations within Africa as well as long-haul services to London and New York City. Its routes are America, Abidjan, ,Abuja ,Accra, Asaba, Banjul, Benin City, Calabar, Cotonou, Dakar, Douala, Enugu, Freetown, Gombe, Ibadan, Ilorin, Johannesburg, JosKaduna ,Kano, Lagos, Libreville, London, Luanda, Monrovia, New York, Owerri ,PortHarcourt, Sokoto ,Uyo ,Warri. Arik airline is currently being managed by Federal Government due to the relapse in it services and lack of adequate staff management.
1.10.5 Aero Contractors
Aero Contractors of Nigeria was formed in 1959 and owned by Schreiner Airways B.V of the Netherlands. It became a company with initially 40% Nigerian holding in 1973 and subsequently 60% in 1976. In January 2004 Schreiner Airways was bought by Canadian Helicopter Corporation (CHC) who acquired 40% holding of Aero contractors while 60% majority share remained within the Ibru family group. Currently, Aero is wholly owned by the Ibru family. Today, Aero has grown from oil service provider to a leading regional schedule carrier operator. Since 2000 when the airline commenced scheduled commercial operation, it has emerged to become the first choice of customers in the region. Aero currently operates passenger services with the Bombardier Dash8 Q300 aircraft (a modern 50-seat pressurized turboprop aircraft) and the Boeing 737-400 and 500 variants with 104 to 144 seats. Its main is hub-Lagos Murtala Muhammed International and Its routes – Abuja,Accra,Asaba,Benin,Calabar,Enugu,Kaduna,Kano,Lagos,Owerri,PortHarcourt(Omagwa International Airport)Port Harcourt (NAF Base),Sokoto,Warri, Uyo. Aero Contractors gave itself-imposed suspension in September 2016 and resumed back in December 2016, the suspension was embarked upon as a strategic business realignment to reposition the airline and return it to the part of profitability.
1.10.6 Med-View Airways
Med-View Airline is an airline based in Lagos, Nigeria. The airline was founded in 2007 as a charter airline, mainly operating Haji flights, and has offered domestic passenger services since November 2012. It has since expanded into regional and long-haul scheduled passenger routes. Med-View Airline Plc was listed on the Nigerian Stock Exchange on January 31, 2017. Med-View Airline operates to nine domestic and five international scheduled destinations in five countries across Nigeria, West Africa, Europe and the Middle East.Its routes- Accra, London, sierria-leone, Jeddah,Abuja,Kaduna, Maduguri, Yola, Portharcourt, Kano,Enugu,Lagos. The airline has six aircrafts in its fleet. The company sets to list by introduction, its 9.75 billion ordinary shares of 50 kobo each at N1.50 per share by January 31st. its market capitalization on listing date would be N14.63 billion.
1.10.7 Dana Air
Dana Air is a Nigerianregional airline headquartered in Ikeja and based out of LagosMurtala Muhammed International Airport. Dana Airlines Limited operating as Dana Air is a fully private sector-owned carrier. The airline commenced flight operations on 10 November 2008 and has since its inauguration progressively developed a route network bringing convenience and choice to the flying public. Following a fatal air crash in 2012 its license was suspended. It was however restored in September 2012 by the Nigeria’s Civil Aviation Authority before the inquiry into the accident was concluded. However, in October 2013, the airline’s license was once again suspended. The airline was audited and resumed flights on 26 January 2014 with a single Boeing 737-500. Its hub at the Murtala Mohammed Airport Terminal 2 (MMA2), Dana Air currently operates domestically on the Lagos – Abuja; Lagos – Port Harcourt, Lagos – Uyo as well as the Port Harcourt – Abuja and Uyo – Abuja routes using its fleet of Boeing McDonnell 83 and Boeing B737-500 aircraft. Dana Air also offers Executive Charter Services using a brand new Bombardier Learjet 45XR. Its routes-Abuja ,Accra,Kaduna,Lagos,Port Harcourt, Uyo,Owerri
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