IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v47y2016icp22-33.html
   My bibliography  Save this article

Managerial perceptions of incentives for and barriers to competing for regional PSO air service contracts

Author

Listed:
  • Merkert, Rico
  • O’Fee, Basil

Abstract

While it has been established in previous research that public support for air services to peripheral or economically underdeveloped regions is justifiable, the current EU Public Service Obligation (PSO) air service mechanism and particularly, the level of competition for PSO contracts, can be improved. This paper sets out to identify best practice for PSO contract sponsors by viewing issues from an air operator perspective. The heart of this paper is a survey of European regional airlines. We examine the airline managers' perspectives in relation to assessing and bidding for PSOs on scheduled air services. Possible areas for improvement include issues around the dissemination of PSO opportunities in the single market, adequate response times for proposal preparation/submission and preparing for the service launch date as well as incentives to develop the air service during the contract period in terms of revenue and patronage. We also highlight issues related to entry barriers, risk sharing, transparency and effectiveness of PSO contract awarding procedures.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:trapol:v:47:y:2016:i:c:p:22-33
    DOI: 10.1016/j.tranpol.2015.12.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X15300809
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2015.12.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. Rico Merkert & James Pearson, 2015. "A Non-parametric Efficiency Measure Incorporating Perceived Airline Service Levels and Profitability," Journal of Transport Economics and Policy, University of Bath, vol. 49(2), pages 261-275, April.
    4. 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.
    5. 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.
    6. James Nolan & Pamela Ritchie & John Rowcroft, 2005. "Small Market Air Service and Regional Policy," Journal of Transport Economics and Policy, University of Bath, vol. 39(3), pages 363-378, September.
    7. Alda Metrass Mendes & Richard de Neufville & Ã lvaro Costa, 2011. "Air Accessibility In Northern Canada: Prospects And Lessons For Remoter Communities," ERSA conference papers ersa11p1647, European Regional Science Association.
    8. Kappes, Jan Willem & Merkert, Rico, 2013. "Barriers to entry into European aviation markets revisited: A review and analysis of managerial perceptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 57(C), pages 58-69.
    9. Matisziw, Timothy C. & Lee, Chieh-Lung & Grubesic, Tony H., 2012. "An analysis of essential air service structure and performance," Journal of Air Transport Management, Elsevier, vol. 18(1), pages 5-11.
    10. 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.
    11. Ouellette, Pierre & Petit, Patrick & Tessier-Parent, Louis-Philippe & Vigeant, Stéphane, 2010. "Introducing regulation in the measurement of efficiency, with an application to the Canadian air carriers industry," European Journal of Operational Research, Elsevier, vol. 200(1), pages 216-226, January.
    12. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mueller, Falko, 2021. "Accessibility for money? An evaluation of subsidized air transport services in Europe and the United States," Transport Policy, Elsevier, vol. 106(C), pages 153-164.
    2. 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.
    3. 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.
    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. Lohmann, Gui & Vianna, Camila, 2016. "Air route suspension: The role of stakeholder engagement and aviation and non-aviation factors," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 199-210.
    6. 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.
    7. Rex, Justin & Ballard, David & Garrow, Laurie A. & Mills, Russell W. & Weingart, David, 2022. "A new GIS database documenting the prevalence of U.S. air service development incentives," Journal of Air Transport Management, Elsevier, vol. 98(C).
    8. Koo, Tay T.R. & Hossein Rashidi, Taha & Park, Jin-Woo & Wu, Cheng-Lung & Tseng, Wen-Chun, 2017. "The effect of enhanced international air access on the demand for peripheral tourism destinations: Evidence from air itinerary choice behaviour of Korean visitors to Australia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 116-129.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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).
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. Mueller, Falko, 2021. "Accessibility for money? An evaluation of subsidized air transport services in Europe and the United States," Transport Policy, Elsevier, vol. 106(C), pages 153-164.
    11. 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.
    12. 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.
    13. Spasojevic, Bojana & Lohmann, Gui, 2022. "Air route development - Lessons from Australia," Journal of Air Transport Management, Elsevier, vol. 104(C).
    14. 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).
    15. Das, Amit Kumar & Bardhan, Amit Kumar & Fageda, Xavier, 2020. "New regional aviation policy in India: Early indicators and lessons learnt," Journal of Air Transport Management, Elsevier, vol. 88(C).
    16. 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.
    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. 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.
    19. 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.
    20. 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.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:47:y:2016:i:c:p:22-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.