IDEAS home Printed from
   My bibliography  Save this article

Small Market Air Service and Regional Policy


  • James Nolan
  • Pamela Ritchie
  • John Rowcroft


In the airline industry the longstanding importance of 'duty to serve' with respect to smaller communities is evinced by the continuation of several support programmes around the world. However, communities with existing air service increasingly view air links on other routes as a desirable commodity - especially as a means to facilitate regional and local economic growth. In this paper, various schemes to attract air service in smaller markets are examined; specifically direct subsidies, protected route packages, and guaranteed revenue approaches including the airline travel bank. Relative orders of magnitude for the direct social costs are derived using a small network simulation model and each mechanism is evaluated in terms of social welfare and underlying agency costs. © 2005 LSE and the University of Bath

Suggested Citation

  • 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.
  • Handle: RePEc:tpe:jtecpo:v:39:y:2005:i:3:p:363-378

    Download full text from publisher

    File URL:;1-
    Download Restriction: Access to full text is restricted to subscribers.

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

    References listed on IDEAS

    1. Baer, Christopher T. & Klein, Daniel B. & Majewski, John, 1992. "From Trunk to Branch: Toll Roads in New York, 1800-1860," University of California Transportation Center, Working Papers qt9pv183b2, University of California Transportation Center.
    2. David M. Levinson, 2002. "Financing Transportation Networks," Books, Edward Elgar Publishing, number 2308.
    3. Fielding, Gordon J. & Klein, Daniel B., 1993. "How To Franchise Highways," University of California Transportation Center, Working Papers qt79z9x6fs, University of California Transportation Center.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. 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.
    2. Valido, Jorge & Pilar Socorro, M. & Hernández, Aday & Betancor, Ofelia, 2014. "Air transport subsidies for resident passengers when carriers have market power," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 388-399.
    3. Barbot, Cristina, 2006. "Low-cost airlines, secondary airports, and state aid: An economic assessment of the Ryanair–Charleroi Airport agreement," Journal of Air Transport Management, Elsevier, vol. 12(4), pages 197-203.
    4. repec:gam:jsusta:v:9:y:2017:i:8:p:1295-:d:105757 is not listed on IDEAS
    5. 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.
    6. Joan Calzada & Xavier Fageda, 2012. "Discounts and Public Service Obligations in the Airline Market: Lessons from Spain," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(4), pages 291-312, June.
    7. 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.
    8. Germá Bel & Xavier Fageda, 2011. "La reforma del modelo de gestión de aeropuertos en España: ¿Gestión conjunta o individual?," Hacienda Pública Española, IEF, vol. 196(1), pages 109-130, january.
    9. 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.
    10. 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.
    11. 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.
    12. repec:eee:transa:v:106:y:2017:i:c:p:116-129 is not listed on IDEAS
    13. Jorge Valido & M. Pilar Socorro & Aday Hernández & Ofelia Betancor, 2012. "Subsidies for resident passengers in air transport markets," Working Papers 2012-10, FEDEA.

    More about this item


    Access and download statistics


    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:tpe:jtecpo:v:39:y:2005:i:3:p:363-378. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.