A critical assessment of the Public Service Obligations (PSO) in European air routes

Abstract

The deregulation of air transport generated the need to safeguard an acceptable level of air connectivity between urban centres and remote European regions. To this end, several protection schemes have been developed around the world, including the imposition of Public Service Obligations (PSOs) in several European air routes. Thirty years after the establishment of PSOs in Europe, the debate over their efficiency and effectiveness is still active. This paper offers an overview of the European PSO program along with a review of the academic literature exploring the main issues that accompany the PSO scheme in order to highlight the main conclusions produced so far and to make suggestions about future research directions and points that call for consideration from both scholars and policymakers.