Air transport subsidies for resident passengers when carriers have market power

Valido, Jorge; Socorro, María del; Hernández, Aday; Betancor, Ofelia

doi:10.1016/j.tre.2014.08.001

Cited by 20 publications

(7 citation statements)

References 27 publications

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“…This is the case of Ecuador, France, Italy, and Portugal. To this point, Valido et al (2014) suggests that the effects of the different mechanisms are related to the proportion of residents/non-residents and their willingness to pay.…”

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confidence: 99%

Air connectivity in remote regions: A comprehensive review of existing transport policies worldwide

Fageda

Suárez-Alemán

Serebrisky

et al. 2018

Journal of Air Transport Management

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A consensus exists in the literature on the strong link between air connectivity and economic growth and development. The need for connecting people and markets is part of national policies in different territories. The existence of remote areas, that is, those that under strict market criteria would not be transport supplied due to lack of commercial profitability, has led to the development of different public policies aimed to support air connectivity in regions where commercial airline operations are not viable. This paper provides a mapping of existing policies applied worldwide to provide air connectivity to remote areas, and critically reviews policies promoting air connectivity, including: 1) route-based policies; 2) passenger-based policies; 3) airline-based policies; and 4) airport-based policies. This effort is the first to compile and critically analyze all the existing alternatives to provide air connectivity in remote areas and to report on experiences worldwide. Moreover, we develop a novel taxonomy of existing public policies when it comes to providing air connectivity to remote areas. After reviewing different policy options and instruments applied globally, the paper ends with a policy discussion.

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confidence: 99%

Air connectivity in remote regions: A comprehensive review of existing transport policies worldwide

Fageda

Suárez-Alemán

Serebrisky

et al. 2018

Journal of Air Transport Management

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“…EAS did not do so in the United States. Discounts to residents in Spain Valido et al (2014) Effects of different discount mechanisms are related to proportion of residents/nonresidents and their willingness to pay. Calzada and Fageda (2012) Demand is higher on routes that offer discounts, but fares (without the discount) are also higher.…”

Section: Essential Air Services (Eas) In the United Statesmentioning

confidence: 99%

Air transport connectivity of remote regions: the impacts of public policies

et al. 2019

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In this paper, we examine the impact of different public policies on air connectivity in remote regions. In particular, we estimate price and supply equations using route level data for several countries around the world that have implemented route-based policies (public service obligations, traffic distribution rules), airline-based policies (state-owned airline) or passengerbased policies (discounts to residents). We find that policies generally achieve affordable prices and high frequency levels in protected routes in comparison to unprotected routes. However, the implementation of these policies may also be associated with some costs.

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“…The theoretical paper by Valido et al (2014) compares the varying effects of two different ways to apply subsidies to residents in the air transport market (ad-valorem and specific subsidies) in a context of market power. They show that if the proportion of resident passengers is high enough, nonresident passengers may be expelled from the market.…”

Section: Introductionmentioning

confidence: 99%

Do maritime passengers’ subsidies in Europe affect prices?

Jiménez

Valido

Morán³

2018

Maritime Policy & Management

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Some European governments subsidize their residents when they travel at sea. This paper seeks to analyze the impact on prices of maritime passengers' subsidies in Europe. Following a review of the scarce academic literature on this topic and the subsidy scheme in Europe, a sample of firms' prices and other characteristics of 40 European routes for 2016 are analyzed. Both an estimation of a price equation and a matching approach are applied and reach the same conclusion: prices per kilometer are around 40 per cent higher on those subsidized routes due to subsidies. This outcome reduces the potential subsidy gain to consumers.

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Air transport subsidies for resident passengers when carriers have market power

Cited by 20 publications

References 27 publications

Air connectivity in remote regions: A comprehensive review of existing transport policies worldwide

Air connectivity in remote regions: A comprehensive review of existing transport policies worldwide

Air transport connectivity of remote regions: the impacts of public policies

Do maritime passengers’ subsidies in Europe affect prices?

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