European air transport public service obligations: a periodic review

Aisling Reynolds-Feighan

Fiscal Studies, 1995, vol. 16, issue 1, 58-74

Abstract: The ‘Third Package’ of European Union air transport liberalisation measures came into effect on 1 January 1993 and has substantially reduced the restrictions on interstate flight operations. The package of measures also includes provision for the member states to impose ‘public service obligations’ on low-density routes which were deemed necessary for the purposes of regional development. In this paper, it is this legislation which is the main focus of attention. In the second section, the background to and contents of the ‘Third Package’ are reviewed. The competitive implications of these measures are briefly outlined. In Section III, the legislation relating to public service obligation routes is critically examined. The Irish government was first to invoke this legislation and several difficulties have come to light as a result. In the final section, recommendations on improvements to the legislation are proposed, based largely on the equivalent US ‘Essential Air Services’ (EAS) programme.

Date: 1995
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