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Faro
Posts: 1565
Joined: Sun Aug 12, 2007 1:08 am

Do Airline Subsidies Still Exist?

Wed Nov 16, 2011 9:15 am

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

Faro
The chalice not my son
 
Someone83
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Joined: Sun Sep 17, 2006 5:47 pm

RE: Do Airline Subsidies Still Exist?

Wed Nov 16, 2011 9:32 am

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
 
rfields5421
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Joined: Thu Jul 19, 2007 12:45 am

RE: Do Airline Subsidies Still Exist?

Wed Nov 16, 2011 2:44 pm

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.
 
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falstaff
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RE: Do Airline Subsidies Still Exist?

Wed Nov 16, 2011 3:00 pm

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
 
vv701
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RE: Do Airline Subsidies Still Exist?

Wed Nov 16, 2011 3:52 pm

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.
 
greenjet
Posts: 869
Joined: Sat Aug 25, 2001 9:59 pm

RE: Do Airline Subsidies Still Exist?

Wed Nov 16, 2011 7:14 pm

A list of European subsidised routes can be found at: http://ec.europa.eu/transport/air/internal_market/pso_en.htm
 
macilree
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Joined: Fri Dec 29, 2006 12:13 pm

RE: Do Airline Subsidies Still Exist?

Wed Nov 16, 2011 7:37 pm

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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