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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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Bibliographic Info

Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 29 (2013)
Issue (Month): C ()
Pages: 118-125

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Handle: RePEc:eee:trapol:v:29:y:2013:i:c:p:118-125

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Related research

Keywords: Procurement of public air service obligations; Aviation policy; Regional airlines; Remote regions;

References

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  1. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Hensher, David A. & Stanley, John, 2008. "Transacting under a performance-based contract: The role of negotiation and competitive tendering," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(9), pages 1143-1151, November.
  3. 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.
  4. 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.
  5. Williams, George & Pagliari, Romano, 2004. "A comparative analysis of the application and use of public service obligations in air transport within the EU," Transport Policy, Elsevier, vol. 11(1), pages 55-66, January.
  6. Alda Metrass Mendes & Richard de Neufville & Ãlvaro Costa, 2011. "Air Accessibility In Northern Canada: Prospects And Lessons For Remoter Communities," ERSA conference papers ersa11p1647, European Regional Science Association.
  7. Saussier, Stephane, 2000. "Transaction costs and contractual incompleteness: the case of Electricite de France," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 189-206, June.
  8. 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.
  9. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December.
  10. 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.
  11. James Nolan & Pamela Ritchie & John Rowcroft, 2005. "Small Market Air Service and Regional Policy," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 39(3), pages 363-378, September.
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