Efficient procurement of public air services—Lessons learned from European transport authorities' perspectives

highlights
• Our survey of transport authorities reveals heterogeneity but also key policy trends.
• We identify best practice in air PSO procurement for policy makers across the globe.
• Authorities should take more ownership in PSOs brands and promote route development.
• Competition, transparency, incentives and risk sharing can improve PSOs' viability.

This paper set out to identify the best practice from different European policy approaches by viewing issues from a sponsoring public transport authority perspective. The heart of this paper is a survey of European air service procurement authorities. We examine the authorities' perspectives on their rationale for imposing public service obligations (PSOs) on scheduled air services including likely future funding trends and investigate various aspects of the procedures connected with the PSO process (e.g., transparency of subsidies and risk sharing with operators). We also explore various aspects of the obligations that authorities actually impose upon routes and operators (e.g. maximum fare, aircraft size etc). A particular interest of this paper is in the authorities' policies regarding marketing the PSO and promoting competition in their tendering exercises. The lessons derived from this EU experience are discussed with a view in assisting policy makers when promoting and drafting their own regional air transport programmes, or in further refining existing schemes.