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

Abstract

This paper examines the impact of different public policies on air connectivity in remote regions. In particular, it estimates 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 passenger-based policies (discounts to residents). It is found that policies generally achieve affordable prices and high frequency levels in protected routes in comparison with unprotected routes. However, the implementation of these policies may also be associated with some costs.