Abstract

"jats:p"As issued in the Competition Policy Brief on the new state aid rules for a competitive aviation industry by the Competition Directorate-General of the European Commission in February 2014"jats:sup"1"/jats:sup", it will be more difficult for unprofitable airports, to obtain financial public subsidies on EU, national or regional level. Although the positive impact of small airports on the regional development and general accessibility was mentioned, still the operating aid to the airports shall be cut out over a maximum of 10 years. It has been further stated that the vast majority of small and regional airports experience problems to cover their running operative costs, as a result from an intensive market competition and overlapping of airports’ catchment areas preventing even some promising airports from growth. Public subsidies are mostly used by the airport management for infrastructural investments, to cover operating losses or to attract price-sensitive airlines. Herewith, among other things, the EU Commission is pointing out at the lack of cooperation structures and network strategies among the regional airports and at rather isolated and individual approach during elaboration of the airport development scenarios. However, the Competition Policy Brief permits public aid to regional airports, among other things if there is sufficient transports need to establish transition periods for small airports; the need for more flexibility of the regional airports in the remote areas has been underlined. The EU Commission is expecting herewith not to close the regional airports, but to stimulate them to operate on cost efficient and profitable basis, and that only the most inefficient airports will be closed. "/jats:p" "jats:p"To cope with the upcoming challenges the regional airports are demanded now to revaluate and reconsider their future development plans. While focusing on the passenger traffic many regional airports ignore or underestimate the benefits of the airfreight market. Although the air cargo has rather a low volume, but very high revenue yield part. Business internationalization is one of the important driving forces for the airfreight nowadays as well as decreasing air transport costs due to improving efficiency and growing competition among the air carriers. Most regional airports in the Baltic Sea region that act totally isolated, do not have a clear picture of the current situation on the international air cargo market, its future perspectives and sustainable development plans. Trying to meet the market demand, the regional airports are making huge and unjustified investments, e.g. improving airport infrastructure. It is not clear till now which elements of the Pan-Baltic cargo market could be managed as an alternative revenue yielding services for consolidated operation by air or what infrastructure is needed to provide the opportunity for an optimal economic mix of road-rail-air-sea transport? Nowadays, to a large degree air cargo traffic relies on scheduled, frequent passenger services in hub-and-spoke as well as in point-to-point traffic. Regional airports are presently suffering from a lack of scheduled uplift capacity. The volume currently transported by air in the regional airports is almost entirely based on the occasional charter flights. However, the growth of the air cargo business is likely to be based not only on cargo charters, but to a larger extend on truck-based services for transit shipments. Onward transportation by truck may occur on road feeder service, so called “flying trucks”, where a real truck substitutes a flight. “Flying trucks” are having flight numbers etc., therefore they must be prioritized in many ways in the BSR transport policy. "/jats:p" "jats:p"This paper investigates the role of Road Feeder Services concept (thereafter named here as “Flying Truck”) as an optional freight value proposition for the development of the regional airports and their possible participation in the air cargo market as a supplement instrument to generate additional revenue, thus making the airports more profitable and attractive. Document type: Article

Abstract

Summary. This paper deals with public service obligation, a form of state aid that applies to air services. The paper first provides general information on the European legislation applying to this form of state aid, and elaborates the legal framework and general principles. The second part is dedicated to a comparison of a similar subsidizing programme in the USA and Australia. An examination of current imposed public serviceobligation routes in Europe is provided in the following section. The coefficients defining the number of imposed PSO routes per various geo-economic variables have been defined. Document type: Article