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Do Airline Subsidies Still Exist?  
User currently offlinefaro From Egypt, joined Aug 2007, 1551 posts, RR: 0
Posted (2 years 10 months 2 weeks 5 days 14 hours ago) and read 5315 times:

Do any airlines still enjoy some measure of direct government subsidies for particular types of operations?

Faro


The chalice not my son
6 replies: All unread, jump to last
 
User currently offlinesomeone83 From Norway, joined Sep 2006, 3401 posts, RR: 3
Reply 1, posted (2 years 10 months 2 weeks 5 days 14 hours ago) and read 5296 times:

Yes, several countries offer subsidies to airlines that offer spesific routes usually in thin and rural areas.

E.g, some of Widerøe and DAT's routes sin Norway receives subsidies from the government, and other coutries have similar subsidies in place


User currently offlinerfields5421 From United States of America, joined Jul 2007, 7607 posts, RR: 32
Reply 2, posted (2 years 10 months 2 weeks 5 days 8 hours ago) and read 5132 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.


User currently onlinefalstaff From United States of America, joined Jun 2006, 6105 posts, RR: 29
Reply 3, posted (2 years 10 months 2 weeks 5 days 8 hours ago) and read 5105 times:
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Quoting rfields5421 (Reply 2):
these are 19 passenger or smaller aircraft providing service to small cities.


I flew a EAS route over the summer MCI-SLN, on Seaport Airlines. It was one of the best commercial air travel experiences I have had in a long time.

SeaPort Airlines MCI-SLN 7/29-8/1 (by falstaff Aug 2 2011 in Trip Reports)



My mug slaketh over on Falstaff N503
User currently onlineVV701 From United Kingdom, joined Aug 2005, 7563 posts, RR: 17
Reply 4, posted (2 years 10 months 2 weeks 5 days 7 hours ago) and read 5061 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.


User currently offlinegreenjet From Ireland, joined Aug 2001, 957 posts, RR: 1
Reply 5, posted (2 years 10 months 2 weeks 5 days 4 hours ago) and read 4924 times:

A list of European subsidised routes can be found at: http://ec.europa.eu/transport/air/internal_market/pso_en.htm

User currently offlinemacilree From New Zealand, joined Dec 2006, 243 posts, RR: 7
Reply 6, posted (2 years 10 months 2 weeks 5 days 4 hours ago) and read 4900 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.



John Macilree
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