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Do Public Service Obligations hamper the cost competitiveness of regional airlines?

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  • Santana, Isabel

Abstract

Panel data is used to model the cost of a set European and US regional air carriers between 1991 and 2002 to see the extent to which they are affected by Public Service Obligations or the US's Essential Air Service Program. Pooling the data set indicates that the Public Service Obligations in Europe do affect the economic performance of carriers, but this is not the case for the US's Essential Air Service Program.

Suggested Citation

  • Santana, Isabel, 2009. "Do Public Service Obligations hamper the cost competitiveness of regional airlines?," Journal of Air Transport Management, Elsevier, vol. 15(6), pages 344-349.
    • Handle: RePEc:eee:jaitra:v:15:y:2009:i:6:p:344-349
    DOI: 10.1016/j.jairtraman.2008.12.001
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    References listed on IDEAS

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    1. Aisling Reynolds-Feighan, 1995. "European air transport public service obligations: a periodic review," Fiscal Studies, Institute for Fiscal Studies, vol. 16(1), pages 58-74, February.
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    Cited by:

    1. Wu, Hanjun & Hong Tsui, Kan Wai & Ngo, Thanh & Lin, Yi-Hsin, 2020. "Impacts of aviation subsidies on regional wellbeing: Systematic review, meta-analysis and future research directions," Transport Policy, Elsevier, vol. 99(C), pages 215-239.
    2. Abreu, José & Fageda, Xavier & Jiménez, Juan Luis, 2018. "An empirical evaluation of changes in Public Service Obligations in Spain," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 1-10.
    3. Leandro, Francisco & Andrade, Antonio R. & Kalakou, Sofia, 2021. "Designing aviation networks under Public Service Obligations (PSO): A case study in Greece," Journal of Air Transport Management, Elsevier, vol. 93(C).
    4. Antonio Martínez Raya & Víctor M. González-Sánchez, 2020. "Tender Management Relating to Imposition of Public Service Obligations on Scheduled Air Routes: An Approach Involving Digital Transformation of Procurement Procedures in Spain," Sustainability, MDPI, vol. 12(13), pages 1-27, July.
    5. Fageda, Xavier & Jiménez, Juan Luis & Díaz, Carlos, 2012. "Fare differences between domestic and international air markets on routes from Gran Canaria," Journal of Air Transport Management, Elsevier, vol. 25(C), pages 8-10.
    6. Fageda, Xavier & Suárez-Alemán, Ancor & Serebrisky, Tomás & Fioravanti, Reinaldo, 2018. "Air connectivity in remote regions: A comprehensive review of existing transport policies worldwide," Journal of Air Transport Management, Elsevier, vol. 66(C), pages 65-75.
    7. Fageda, Xavier & Jiménez, Juan Luis & Valido, Jorge, 2016. "Does an increase in subsidies lead to changes in air fares? Empirical evidence from Spain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 235-242.
    8. Socorro, M. Pilar & Betancor, Ofelia, 2020. "Air transport subsidies for resident passengers: The unexpected effects on competition," Research in Transportation Economics, Elsevier, vol. 79(C).
    9. Chong Wu & Xin Wang & Xinying Zhang & Yongli Li & Brad O'Brien, 2013. "Chinese airline competitiveness evaluation based on extended binary relative evaluation(BRE) model," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 14(sup1), pages 227-256, June.
    10. Minato, Nobuaki & Morimoto, Risako, 2017. "Dynamically interdependent business model for airline–airport coexistence," Journal of Air Transport Management, Elsevier, vol. 64(PB), pages 161-172.
    11. Pita, João Pedro & Antunes, António Pais & Barnhart, Cynthia & de Menezes, António Gomes, 2013. "Setting public service obligations in low-demand air transportation networks: Application to the Azores," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 35-48.
    12. Wittman, Michael D. & Allroggen, Florian & Malina, Robert, 2016. "Public service obligations for air transport in the United States and Europe: Connectivity effects and value for money," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 112-128.
    13. Leão e Silva, Celso José & de Andrade, Maurício Oliveira & Falcão, Viviane Adriano & da Silva, Carlos Fabricio Assunção, 2022. "The geographical characteristics of subsidized air routes serving as lifelines," Journal of Air Transport Management, Elsevier, vol. 104(C).
    14. Xavier Fageda & Juan Luis Jiménez & Carlos Díaz Santamaría, 2012. "“Price differences between domestic and international air markets: an empirical application to routes from Gran Canaria”," IREA Working Papers 201207, University of Barcelona, Research Institute of Applied Economics, revised Mar 2012.
    15. Stefan Gössling & Frank Fichert & Peter Forsyth, 2017. "Subsidies in Aviation," Sustainability, MDPI, vol. 9(8), pages 1-19, July.
    16. Salesi, Vinolia Kilinaivoni & Kan Tsui, Wai Hong & Fu, Xiaowen & Gilbey, Andrew, 2022. "Stakeholder perceptions of the impacts of aviation subsidies in the South Pacific Region," Journal of Air Transport Management, Elsevier, vol. 103(C).
    17. Fageda, Xavier & Jiménez, Juan Luis & Valido, Jorge, 2017. "An empirical evaluation of the effects of European public policies on island airfares," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 288-299.
    18. Calzada, Joan & Fageda, Xavier, 2014. "Competition and public service obligations in European aviation markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 104-116.
    19. Chen, Yilin & Hou, Meng & Wang, Kun & Yang, Hangjun, 2023. "Government interventions in regional airline markets based on aircraft size—Welfare and environmental implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 169(C).
    20. Roberto Rendeiro Martín-Cejas, 2022. "The Influence of the Resident Subsidy on Regional Carrier Economies and the Environment in the Canary Interisland Air Traffic Network," Tourism and Hospitality, MDPI, vol. 3(3), pages 1-15, June.
    21. Pita, João P. & Adler, Nicole & Antunes, António P., 2014. "Socially-oriented flight scheduling and fleet assignment model with an application to Norway," Transportation Research Part B: Methodological, Elsevier, vol. 61(C), pages 17-32.
    22. Branko Bubalo, 2012. "Social costs of public service obligation routes—calculating subsidies of regional flights in Norway," Netnomics, Springer, vol. 13(2), pages 125-140, July.
    23. Joan Calzada & Xavier Fageda, 2012. "Discounts and Public Service Obligations in the Airline Market: Lessons from Spain," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(4), pages 291-312, June.
    24. Merkert, Rico & Williams, George, 2013. "Determinants of European PSO airline efficiency – Evidence from a semi-parametric approach," Journal of Air Transport Management, Elsevier, vol. 29(C), pages 11-16.

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