rfields5421 From United States of America, joined Jul 2007, 6149 posts, RR: 25 Reply 2, posted (1 year 6 months 1 week 5 hours ago) and read 1793 times:
Subsidies vary in type.
For example in the United States - Essential Air Service (EAS) is a cash guarantee to the airline for the route if ticket sales do not raise a certain amount - these are 19 passenger or smaller aircraft providing service to small cities.
As mentioned above, some other countries have similar programs.
The biggest subsidy is tax breaks - where an airline receives a reduced, or no, tax rate in return for service. In the US, these can be done by local authorities. Ryanair makes pursuing such subsidies a key part of their business model.
Another subsidy is reduced or free rent at airport terminals, subsidized construction of gate areas, etc.
VV701 From United Kingdom, joined Aug 2005, 6620 posts, RR: 17 Reply 4, posted (1 year 6 months 1 week 3 hours ago) and read 1722 times:
In the UK the Scottish Government subsidises essential flights to the remoter areas of the Highlands and Islands through its Air Discount Scheme.
Anyone who lives in Colonsay, Islay, Jura, Orkney, Shetland, the Western Isles, Islay or, on the mainland, Caithness and North West Sutherland can apply for membership to the Air Discount Scheme. As members they will obtain a 40 per cent discount on the flight ticket price for flights within the defined region and to Scottish hub airports. The Scottish government will pay the airline the residual cost of the ticket.
The scheme is approved by the EU.
Google "Air Discount Scheme" for more information - sorry I cannot make a link work.
macilree From New Zealand, joined Dec 2006, 243 posts, RR: 7 Reply 6, posted (1 year 6 months 1 week ago) and read 1561 times:
Quoting rfields5421 (Reply 2): The biggest subsidy is tax breaks - where an airline receives a reduced, or no, tax rate in return for service
Too true.
The following quote comes from an article in the Australian dated 22 December 2007:
"Australian airlines are forced to write off the value of their fleet over 10 years while Singapore has a three-year write-off period and Hong Kong can depreciate aircraft in five years."
This is reported not to be an issue for EK, for example, as in the UAE it pays no tax.
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