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Efficient procurement of public air services—Lessons learned from European transport authorities' perspectives

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  • Merkert, Rico
  • O’Fee, Basil

Abstract

This paper set out to identify the best practice from different European policy approaches by viewing issues from a sponsoring public transport authority perspective. The heart of this paper is a survey of European air service procurement authorities. We examine the authorities' perspectives on their rationale for imposing public service obligations (PSOs) on scheduled air services including likely future funding trends and investigate various aspects of the procedures connected with the PSO process (e.g., transparency of subsidies and risk sharing with operators). We also explore various aspects of the obligations that authorities actually impose upon routes and operators (e.g. maximum fare, aircraft size etc). A particular interest of this paper is in the authorities' policies regarding marketing the PSO and promoting competition in their tendering exercises. The lessons derived from this EU experience are discussed with a view in assisting policy makers when promoting and drafting their own regional air transport programmes, or in further refining existing schemes.

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  • Merkert, Rico & O’Fee, Basil, 2013. "Efficient procurement of public air services—Lessons learned from European transport authorities' perspectives," Transport Policy, Elsevier, vol. 29(C), pages 118-125.
    • Handle: RePEc:eee:trapol:v:29:y:2013:i:c:p:118-125
    DOI: 10.1016/j.tranpol.2013.04.008
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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. 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.
    3. Spasojevic, Bojana & Lohmann, Gui, 2022. "Air route development - Lessons from Australia," Journal of Air Transport Management, Elsevier, vol. 104(C).
    4. Solvoll, Gisle & Hanssen, Thor-Erik Sandberg, 2018. "Importance of aviation in higher education," Journal of Air Transport Management, Elsevier, vol. 72(C), pages 47-55.
    5. Wu, Hanjun & Hong Tsui, Kan Wai & Ngo, Thanh & Lin, Yi-Hsin, 2023. "Airport subsidies impact on wellbeing of smaller regions: A systemic examination in New Zealand," Transport Policy, Elsevier, vol. 130(C), pages 26-36.
    6. 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).
    7. Tsekouras, Kostas & Chatzistamoulou, Nikos & Kounetas, Kostas & Broadstock, David C., 2016. "Spillovers, path dependence and the productive performance of European transportation sectors in the presence of technology heterogeneity," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 261-274.
    8. Bråthen, Svein & Eriksen, Knut Sandberg, 2018. "Regional aviation and the PSO system – Level of Service and social efficiency," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 248-256.
    9. Borsati, Mattia & Fageda, Xavier, 2024. "Airline price responses in the face of demand shocks: European lessons from the COVID-19 pandemic," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 186(C).
    10. 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.
    11. 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).
    12. Gordan Stojić & Dušan Mladenović & Olegas Prentkovskis & Slavko Vesković, 2018. "A Novel Model for Determining Public Service Compensation in Integrated Public Transport Systems," Sustainability, MDPI, vol. 10(9), pages 1-20, August.
    13. Merkert, Rico & Beck, Matthew, 2017. "Value of travel time savings and willingness to pay for regional aviation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 96(C), pages 29-42.
    14. Merkert, Rico & O’Fee, Basil, 2016. "Managerial perceptions of incentives for and barriers to competing for regional PSO air service contracts," Transport Policy, Elsevier, vol. 47(C), pages 22-33.
    15. 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.
    16. Wittman, Michael D., 2014. "Public funding of airport incentives in the United States: The efficacy of the Small Community Air Service Development Grant program," Transport Policy, Elsevier, vol. 35(C), pages 220-228.
    17. Kinene, Alan & Granberg, Tobias Andersson & Birolini, Sebastian & Adler, Nicole & Polishchuk, Valentin & Skoglund, Jean-Marie, 2022. "An auction framework for assessing the tendering of subsidised routes in air transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 320-337.
    18. 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.
    19. 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.
    20. Merkert, Rico & Beck, Matthew J., 2020. "Can a strategy of integrated air-bus services create a value proposition for regional aviation management?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 527-539.
    21. Medina-Muñoz, Diego Ramón & Medina-Muñoz, Rita Dolores & Suárez-Cabrera, Miguel à ngel, 2018. "Determining important attributes for assessing the attractiveness of airlines," Journal of Air Transport Management, Elsevier, vol. 70(C), pages 45-56.
    22. Antunes, António P. & Santos, Miguel G. & Pita, João P. & Menezes, António G., 2018. "Study on the evolution of the air transport network of the Azores," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 837-851.
    23. Antonio Martínez Raya & Víctor M. González-Sánchez, 2021. "Efficiency and Sustainability of Regional Aviation on Insular Territories of the European Union: A Case Study of Public Service Obligations on Scheduled Air Routes among the Balearic Islands," Sustainability, MDPI, vol. 13(7), pages 1-31, April.
    24. Baker, Douglas & Merkert, Rico & Kamruzzaman, Md., 2015. "Regional aviation and economic growth: cointegration and causality analysis in Australia," Journal of Transport Geography, Elsevier, vol. 43(C), pages 140-150.

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