Factors Influencing the Airline Decision-Making Process in Planning Pricing Mechanisms in the Nigerian Aviation Industry

The airline industry is faced with a lot of challenges based on their various operations in terms of the carriage of goods and passengers. Part of this challenge is the issue of the best pricing strategies to be adopted. Prior to setting fare, the airline industry considered a number factors before the decision is implemented looking at customer satisfaction and profit making. Therefore, based on that, this study set out to assess the factors that influence airline pricing decisions in the Nigerian airline industry. The scope of the study covers all the domestic airlines operating in Nigeria. A questionnaire was administered to three hundred forty-nine staff consist of three categories of staffers (directorate, managerial, and supervisory) of all the domestic airlines in Nigeria. The collected data were analyzed using multiple regression analysis. Eleven variables (factors) were selected as attributes and tested. These include: demand, cost of inputs and supply, prevailing market airfare price, prices (fares) of alternative modes, route status, period (time) of supply and demand, distance between origin and destination, landing fees, availability of slots in peak periods, security on the origin-destination (O-D) market, and availability of aircraft maintenance. The results revealed that distance between the origin and destination, time of supply, and demand are the most significant factors influencing airline pricing decisions in the Nigerian airline industry. Therefore, based on the findings of the study, the study recommends that the airline industry must ensure that passengers are fully informed if prices are changed and also ensure the security of passengers from origin to destination.