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A Critical Assessment of The Public Service Obligations (PSO) in European Air Routes

Year 2022, Volume: 6 Issue: 3, 404 - 410, 22.11.2022
https://doi.org/10.30518/jav.1179509

Abstract

The deregulation of air transport created the need to safeguard an acceptable level of air connectivity between urban centres and remote European regions. To this end, several protection schemes have been developed around the world, including the imposition of Public Service Obligations (PSOs) in a few European air routes. Thirty years after the establishment of PSOs in Europe, the debate over their efficiency and effectiveness is still active. This paper offers an overview of the European PSO program along with a review of the academic literature exploring the main issues that accompany the PSO scheme. The main findings that call for consideration from both scholars and policymakers are the need to strengthen the competition in these non-commercially attracting routes, the necessity for central network design and coordination and the requirement for transparency and open dissemination of information regarding the PSO routes.

Supporting Institution

RESEARCH –CREATE – INNOVATE

Project Number

T1EDK-04743

References

  • Abreu, J., Fageda, X., & Jiménez, J. L. (2018). An empirical evaluation of changes in Public Service Obligations in Spain. Journal of Air Transport Management, 67, 1-10.
  • Álvarez-Albelo, C. D., Hernández-Martín, R., & Padrón-Fumero, N. (2020). The effects on tourism of airfare subsidies for residents: The key role of packaging strategies. Journal of Air Transport Management, 84, 101772.
  • Angelopoulos, J., Chlomoudis, C., Christofas, P., & Papadimitriou, S. (2013). Cost assessment of sea and air transport PSO services: The case of Greece. International Journal of Maritime, Trade and Economic Issues, 1(2), 3-49.
  • Bråthen, S., & Eriksen, K. S. (2018). Regional aviation and the PSO system–Level of Service and social efficiency. Journal of Air Transport Management, 69, 248-256.
  • C 194/01 (2017). Interpretative guidelines on Regulation (EC) No 1008/2008 of the European Parliament and of the Council — Public Service Obligations (PSO). European Commission.
  • Calzada, J., & Fageda, X. (2014). Competition and public service obligations in European aviation markets. Transportation Research Part A: Policy and Practice, 70, 104-116.
  • Costa, J., Alves, T., Andrade, A. R., & Kalakou, S. (2021). Assessing efficiency in public service obligations in European air transport using Data Envelopment Analysis. Case Studies on Transport Policy, 9(4), 1783-1809.
  • Di Francesco, A., & Pagliari, R. (2012). The potential impact of removing public service obligation regulations on air fares between the Italian Mainland and the island of Sardinia. Journal of Transport Geography, 24, 332-339.
  • Dijkstra L. and Poelman H. (2008). Remote Rural Regions: How the proximity to a city influences the performance of rural regions, Regional Focus N°1/2008, EU - DG REGIO, Brussels.
  • EC (2008). Regulation. No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on Common Rules for the Operation of Air Services in the Community (recast). Commission of the European Communities, Brussels, Belgium. /https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX %3A32008R1008
  • EC (2019). PSO inventory table. European Commission https://ec.europa.eu/transport/sites/transport/files/pso_inventory_table.pdf
  • EEC (1992), Regulation No 2408/1992 of the European Parliament and of the Council on access for Community air carriers to intra-Community air routes, Council of the European Communities, Brussels, Belgium. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A31992R240 8
  • ERA (2016). Public Service Obligation (PSO) routes in Europe. European Regions Airline Association. United Kingdom. https://www.eraa.org/system/files/170105_pb_pso_brochure_2016.pdf
  • Fageda, X., Jiménez, J. L., & Fageda et al., Valido, J. (2017). An empirical evaluation of the effects of European public policies on island airfares. Transportation Research Part A: Policy and Practice, 106, 288-299.
  • Fageda, X., Suárez-Alemán, A., Serebrisky, T., & Fioravanti, R. (2018). Air connectivity in remote regions: A comprehensive review of existing transport policies worldwide. Journal of Air Transport Management, 66, 65-75.
  • Fageda, X., Suárez-Alemán, A., Serebrisky, T., & Fioravanti, R. (2019). Air transport connectivity of remote regions: the impacts of public policies. Regional Studies 53:8, 1161-1169.
  • Fu, X., Oum, T. H., & Zhang, A. (2010). Air transport liberalization and its impacts on airline competition and air passenger traffic. Transportation Journal, 49(4), 24. https://www.jstor.org/stable/40904912
  • GTP (2019). Greek Island Residents Can Now Claim Air Transport Discounts. Greek Travel Pages.https://news.gtp.gr/2019/05/21/greek-island-residents-can-now-claim-air-transport-discounts/
  • ICAO (2003). European Experience of air transport liberalization. International Civil Aviation Organization. Montreal, Canada. https://www.icao.int/sustainability/casestudies/statesreplies/europeliberalization_en.pdf
  • Martínez Raya, A., & González-Sánchez, V. M. (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, 12(13), 5322.
  • Merkert, R., & O’Fee, B. (2013). Efficient procurement of public air services—Lessons learned from European transport authorities' perspectives. Transport Policy, 29, 118-125.
  • Merkert, R., & Williams, G. (2013). Determinants of European PSO airline efficiency–Evidence from a semi-parametric approach. Journal of Air Transport Management, 29, 11-16.
  • OECD (2011). OECD regional typology. Directorate for Public Governance and Territorial Development.
  • Poulaki, I., Papatheodorou, A., Panagiotopoulos, A., & Liasidou, S. (2022). Exclave accessibility and cross-border travel: the pene-exclave of Ceuta, Spain. Tourism Geographies, 24(1), 152-176.
  • Reynolds-Feighan, A. (1995). European air transport public service obligations: a periodic review. Fiscal Studies, 16(1), 58-74. https://www.jstor.org/stable/24437967
  • Rigas, K. (2009). Boat or airplane? Passengers’ perceptions of transport services to islands. The example of the Greek domestic leisure market. Journal of Transport Geography, 17(5), 396-401.
  • Sambracos, E. (2001, December). Air-sea transport: competitiveness or complementarity in the Greek insular market. In Proceedings "International conference on Air Transport and Airports evolution in the 21st Century" (pp. 3-4).
  • Smyth, A., Christodoulou, G., Dennis, N., Marwan, A. A., & Campbell, J. (2012). Is air transport a necessity for social inclusion and economic development? Journal of Air Transport Management, 22, 53-59.
  • Socorro, M. P., & Betancor, O. (2020). Air transport subsidies for resident passengers: The unexpected effects on competition. Research in Transportation Economics, 79,100772.
  • Williams, G., & Pagliari, R. (2004). A comparative analysis of the application and use of public service obligations in air transport within the EU. Transport Policy, 11(1), 55-66.
  • Williams, G., (2010). European experience of public service obligations. In: Williams, G., Bråthen, S. (Eds.), Air Transport Provision in Remoter Regions. Ashgate Publishing, UK.
  • Wu, H., Tsui, K. W. H., Ngo, T., & Lin, Y. H. (2020). Impacts of aviation subsidies on regional wellbeing: Systematic review, meta-analysis and future research directions. Transport Policy 99, 215-239.
Year 2022, Volume: 6 Issue: 3, 404 - 410, 22.11.2022
https://doi.org/10.30518/jav.1179509

Abstract

Project Number

T1EDK-04743

References

  • Abreu, J., Fageda, X., & Jiménez, J. L. (2018). An empirical evaluation of changes in Public Service Obligations in Spain. Journal of Air Transport Management, 67, 1-10.
  • Álvarez-Albelo, C. D., Hernández-Martín, R., & Padrón-Fumero, N. (2020). The effects on tourism of airfare subsidies for residents: The key role of packaging strategies. Journal of Air Transport Management, 84, 101772.
  • Angelopoulos, J., Chlomoudis, C., Christofas, P., & Papadimitriou, S. (2013). Cost assessment of sea and air transport PSO services: The case of Greece. International Journal of Maritime, Trade and Economic Issues, 1(2), 3-49.
  • Bråthen, S., & Eriksen, K. S. (2018). Regional aviation and the PSO system–Level of Service and social efficiency. Journal of Air Transport Management, 69, 248-256.
  • C 194/01 (2017). Interpretative guidelines on Regulation (EC) No 1008/2008 of the European Parliament and of the Council — Public Service Obligations (PSO). European Commission.
  • Calzada, J., & Fageda, X. (2014). Competition and public service obligations in European aviation markets. Transportation Research Part A: Policy and Practice, 70, 104-116.
  • Costa, J., Alves, T., Andrade, A. R., & Kalakou, S. (2021). Assessing efficiency in public service obligations in European air transport using Data Envelopment Analysis. Case Studies on Transport Policy, 9(4), 1783-1809.
  • Di Francesco, A., & Pagliari, R. (2012). The potential impact of removing public service obligation regulations on air fares between the Italian Mainland and the island of Sardinia. Journal of Transport Geography, 24, 332-339.
  • Dijkstra L. and Poelman H. (2008). Remote Rural Regions: How the proximity to a city influences the performance of rural regions, Regional Focus N°1/2008, EU - DG REGIO, Brussels.
  • EC (2008). Regulation. No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on Common Rules for the Operation of Air Services in the Community (recast). Commission of the European Communities, Brussels, Belgium. /https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX %3A32008R1008
  • EC (2019). PSO inventory table. European Commission https://ec.europa.eu/transport/sites/transport/files/pso_inventory_table.pdf
  • EEC (1992), Regulation No 2408/1992 of the European Parliament and of the Council on access for Community air carriers to intra-Community air routes, Council of the European Communities, Brussels, Belgium. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A31992R240 8
  • ERA (2016). Public Service Obligation (PSO) routes in Europe. European Regions Airline Association. United Kingdom. https://www.eraa.org/system/files/170105_pb_pso_brochure_2016.pdf
  • Fageda, X., Jiménez, J. L., & Fageda et al., Valido, J. (2017). An empirical evaluation of the effects of European public policies on island airfares. Transportation Research Part A: Policy and Practice, 106, 288-299.
  • Fageda, X., Suárez-Alemán, A., Serebrisky, T., & Fioravanti, R. (2018). Air connectivity in remote regions: A comprehensive review of existing transport policies worldwide. Journal of Air Transport Management, 66, 65-75.
  • Fageda, X., Suárez-Alemán, A., Serebrisky, T., & Fioravanti, R. (2019). Air transport connectivity of remote regions: the impacts of public policies. Regional Studies 53:8, 1161-1169.
  • Fu, X., Oum, T. H., & Zhang, A. (2010). Air transport liberalization and its impacts on airline competition and air passenger traffic. Transportation Journal, 49(4), 24. https://www.jstor.org/stable/40904912
  • GTP (2019). Greek Island Residents Can Now Claim Air Transport Discounts. Greek Travel Pages.https://news.gtp.gr/2019/05/21/greek-island-residents-can-now-claim-air-transport-discounts/
  • ICAO (2003). European Experience of air transport liberalization. International Civil Aviation Organization. Montreal, Canada. https://www.icao.int/sustainability/casestudies/statesreplies/europeliberalization_en.pdf
  • Martínez Raya, A., & González-Sánchez, V. M. (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, 12(13), 5322.
  • Merkert, R., & O’Fee, B. (2013). Efficient procurement of public air services—Lessons learned from European transport authorities' perspectives. Transport Policy, 29, 118-125.
  • Merkert, R., & Williams, G. (2013). Determinants of European PSO airline efficiency–Evidence from a semi-parametric approach. Journal of Air Transport Management, 29, 11-16.
  • OECD (2011). OECD regional typology. Directorate for Public Governance and Territorial Development.
  • Poulaki, I., Papatheodorou, A., Panagiotopoulos, A., & Liasidou, S. (2022). Exclave accessibility and cross-border travel: the pene-exclave of Ceuta, Spain. Tourism Geographies, 24(1), 152-176.
  • Reynolds-Feighan, A. (1995). European air transport public service obligations: a periodic review. Fiscal Studies, 16(1), 58-74. https://www.jstor.org/stable/24437967
  • Rigas, K. (2009). Boat or airplane? Passengers’ perceptions of transport services to islands. The example of the Greek domestic leisure market. Journal of Transport Geography, 17(5), 396-401.
  • Sambracos, E. (2001, December). Air-sea transport: competitiveness or complementarity in the Greek insular market. In Proceedings "International conference on Air Transport and Airports evolution in the 21st Century" (pp. 3-4).
  • Smyth, A., Christodoulou, G., Dennis, N., Marwan, A. A., & Campbell, J. (2012). Is air transport a necessity for social inclusion and economic development? Journal of Air Transport Management, 22, 53-59.
  • Socorro, M. P., & Betancor, O. (2020). Air transport subsidies for resident passengers: The unexpected effects on competition. Research in Transportation Economics, 79,100772.
  • Williams, G., & Pagliari, R. (2004). A comparative analysis of the application and use of public service obligations in air transport within the EU. Transport Policy, 11(1), 55-66.
  • Williams, G., (2010). European experience of public service obligations. In: Williams, G., Bråthen, S. (Eds.), Air Transport Provision in Remoter Regions. Ashgate Publishing, UK.
  • Wu, H., Tsui, K. W. H., Ngo, T., & Lin, Y. H. (2020). Impacts of aviation subsidies on regional wellbeing: Systematic review, meta-analysis and future research directions. Transport Policy 99, 215-239.
There are 32 citations in total.

Details

Primary Language English
Journal Section Review
Authors

Elen Paraskevi Paraschi 0000-0002-7226-8239

Antonios Georgopoulos This is me 0000-0002-6737-3763

Panagiotis Polychroniou This is me 0000-0001-6857-8819

Maria Kalogera This is me 0000-0002-4875-6785

Project Number T1EDK-04743
Early Pub Date November 21, 2022
Publication Date November 22, 2022
Submission Date September 26, 2022
Acceptance Date November 10, 2022
Published in Issue Year 2022 Volume: 6 Issue: 3

Cite

APA Paraschi, E. P., Georgopoulos, A., Polychroniou, P., Kalogera, M. (2022). A Critical Assessment of The Public Service Obligations (PSO) in European Air Routes. Journal of Aviation, 6(3), 404-410. https://doi.org/10.30518/jav.1179509

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