Econometric Modeling of Route-Level Market Share Dynamics in Nigeria’s Domestic Airline Sector

Abstract The paper examines the market share dynamics of domestic airlines in Nigeria, focusing on key factors influencing their economic sustainability. Using an evolving econometric market share modeling framework, the research analyzes quarterly route-based panel data from 2005 to 2023. Variables such as average fare, number of competing airlines per route, flight frequency, and enplaned passenger volume were identified as significant predictors of market share. Market share is defined as the proportion of passengers carried by a specific airline on a given route compared to competitors. Findings reveal that competition, flight frequency, and passenger volume are primary drivers of market share in Nigeria's domestic airline market, while fare pricing plays a secondary role. Airlines in Nigeria seeking higher market shares should prioritize strategic route expansion, service differentiation, and optimized flight schedules to attract passengers. The study underscores that high market share alone does not guarantee economic sustainability; it must be complemented by profitability metrics, revenue stability, and operational efficiency. In the Nigerian context, integrating variables such as fare pricing, competition levels, and passenger demand into econometric models provides actionable insights for enhancing airline competitiveness and sustainability. The research contributes to the evolving discourse on airline market share modeling in Africa, offering empirical evidence to support strategic decision-making in Nigeria’s domestic aviation sector.