Route Architecture and Cost Model Impact on Route Profitability of Indigenous Airlines in Nigeria.

The airline industry is one of the most important service industries in the world. Aviation industry offers benefits in social, economic and political integration of countries, regions and indeed the whole continent. However, the aviation industry in developing and less-developed countries has suffered undue and cumulative neglect from the governments, owners and managers, hence creating an institutional decay in the sector and undermining the performance of the industry. The airline industry in Nigeria faces challenges in safety oversight, route architecture and cost model, as well as having many small non-viable privately-owned carriers. The choice of route architecture and cost model affects performance of airlines in varying proportions. This study therefore investigated the effect of route architecture and cost model on route profitability of selected indigenous airlines
in Nigeria. This study adopted a cross-sectional survey research design. The population of this study was 170 senior management staff of the 6 selected local airlines operating in Nigeria. The sample size was 170 determined using total enumeration method. A structured and validated questionnaire was used for data collection. The reliability test yielded Cronbach’s alpha for the constructs ranges from 0.75 to 0.93. The response rate was 94.04%. Data were analyzed using descriptive and inferential statistics. Findings revealed that route architecture and cost model had significant effect on route profitability of selected indigenous airlines in Nigeria (Adj. R2 = 0.499, F(5, 152) = 32.259, p<0.05). It is recommended that industry practitioners and aviation entrepreneurs pay greater attention to route architecture and cost model in determining their route profitability especially with the new challenges posed by the COVID-19 pandemic to the aviation industry.