THE ROLE OF EFFECTIVE FINANCIAL MANAGEMENT ON THE STABILITY OF NIGERIA’S DOMESTIC AIRLINES AND ITS IMPACT ON AIRPORT SERVICE PROVIDERS

Abstract

The viability of domestic airlines in developing nations continues to be a significant concern, mostly due to inadequate financial management and unstable operating conditions. This research studies the significance of proficient financial management in improving the stability of Nigeria's domestic airlines and analyzes the resultant effects of airline financial stability on airport service providers (ASPs). A mixed-methods research strategy was used, integrating survey data from airline and ASP executives with comprehensive interviews with industry regulators and top finance management. Quantitative data were analyzed by structural equation modeling, whilst qualitative data underwent theme analysis. The results indicate that liquidity management, cost control efficiency, and revenue diversification have substantial beneficial impacts on airline stability. In contrast, financial instability inside airlines was shown to negatively impact Average Selling Prices (ASPs) due to delayed payments, diminished service demand, and operational unpredictability. This research enhances aviation finance literature by empirically connecting airline financial governance to service provider performance in a developing nation environment. Policy suggestions advocate for enhanced financial monitoring, stronger corporate governance, and cooperative financial frameworks between airlines and ASPs to foster sector-wide sustainability.