CHAPTER ONE

INTRODUCTION

Assessment of future trends in aircraft movements and of passengers and freight traffic flows underpin the planning of aviation policies. Generally, the scale of air transport operations has changed out of all recognition since the signature of the Chicago convention at the end of 1944. Scheduled domestic and international air services carried 9 million passengers in 1945; in 1999 the number of passengers passed 1.5billion for the first time. In fact, growth in passengers traffic has averaged about 10% annually, though the rate has slowed as the air transport market has become more mature, from the 20%plus recorded in the first ten postwar years to less than 5% in recent decades. The output of air transport has increased by a factor of thirty since 1960.

Although world gross domestic product (GDP), which is the broadest available measure of output, increased by a factor of only 3.8 over the same period, there is a strong correlation between the two measures. Statistical analyses have shown that growth in GDP, reflected in increasing commercial and business activity and increasing personal income and propensity to travel, accounts for about two thirds of air travel growth. Demand for airfreight service is also primarily a function of economic growth and international trade. Other economic and structural factors, which influence the rate of growth, include improved services, reductions in airline fares, business globalization and changes in population and income distribution.

Airlines can respond to growth in the demand for passenger travel by scheduling their flights, using larger aircraft or achieving higher load factors. During the 1970s they accommodated most of the rapid growth in demand by introducing larger aircraft, which helped keep the growth in aircraft movements quite small. Since the early 1980s, the trend in average aircraft size has leveled out and the rate of growth of aircraft movements has approached the growth rate for passenger traffic. Average load factors have improved gradually as a result of marketing initiatives and yield management programmes, though there is evidence that the rate of increase is slowing. The average stage length is also growing, by an average of 1-2% over the last twenty years, because of faster growth in passenger and freight traffic on long haul than on short-haul routes.

Airline yields have declined on average in real terms almost every year since the introduction of jet aircraft. Airline fares and rates reflect changes in operating costs and competitive conditions. Between 1960 and 1998 real passenger revenue yield per passenger kilometer fell by 2.8% per annum on average while freight yield per freight tone-kilometer fell by 3.6% per annum on average. World scheduled airline operating cost per available tone-kilometer, or unit costs, declined by an average of 2.4% per annum in the same period. Invariably, the global trend and operational challenges are reflections of the situation in Nigeria. Airline operations and management since the time of deregulation had gone through turbulent time and is now stabilizing the through government policies and increased in passenger movement.

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