ABSTRACT
The importance of air service to local economic development, coupled with airline industry changes, has led many communities to attempt to retain or attract new service by offering financial incentives directly to air carriers. This chapter explores many of the ethical issues surrounding the use of air service development incentives. It provides an overview of common air service development (ASD) incentives and programs. The chapter presents case studies of incentive programs to illustrate the wide range of views on these programs. The chapter analyzes the ethics of incentives, not only in air service development but also from a wider perspective. Community ASD incentives differ from airport incentives in that they are not subject to Federal Aviation Administration (FAA) rules and Airport Improvement Program (AIP) grant assurances. The two most common community ASD incentives are minimum revenue guarantees (MRGs) and travel banks.
