empirical study of air transport demand forecast in Nigeria

Abstract

The aim of the study is to estimate the air travel demand forecast of domestic passengers’ travels in Nigeria from 2002-2016. Data wesourced from Central Bank of Nigeria, National Bureau of Statistics, and Federal Airport Authority of Nigeria. The study utilized multiple regressions model using Stata-Graphic software solver to analyze the data. From the analysis, the result shows that there is significant relationship between the explanatory variable (passengers) and unexplanatory variables National Disposable Income, Population, Average Airfare, Gross Domestic Product, Exchange Rate, Total Expenditure, and Crude oil price, accounted for adjusted R of 93.624% relationship with demand for domestic air travel of passenger. The R-square statistic shows that the fitted model explains the variability in Number of passenger (NPAX) which is 96.8124%.  The Hypothesis testing reveals that National Disposable Income and Air fare have strong statistically significant relationship with the demand for domestic air travel with P-value of 0.0013. Moreso, there is statistically significant relationship for National Disposable Income, Average Airfare, and Crude oil price with P-value of 0.0017 and 0.0445 respectively. Furthermore, forecast of the number of passengers and average airfare was carried out using ARIMA (1,0,0) model which made available the future predicted values for the number of passenger movement and average airfare for the next 10-12 years to come.  Thus, the study recommends that stakeholders in the air transport sector should work towards improving the capacity and infrastructure to accommodate the growth of air travel demand for domestic air travel in Nigeria. Policy implications were made on how to regulate the sector by having a good pricing policy to control the air fare for the industry.