ABSTRACT
While air services to remote regions are considered to be a niche market, they are much more than that to the communities they serve both from a passenger and freight perspective. Given the characteristics of operating aircraft on such routes, there is often a need for government intervention, which when done well is desirable (as is stimulates not only economic but also social and cultural development of these regions). Designing efficient contracts and incentive schemes that deliver such benefits is challenging, however, and requires both a forward-looking strategy of the authorities and airlines involved as well smart incentive schemes that allow competition within or those markets. This chapter examines the managerial challenges of operating such services, including asset (i.e. fleet) and cost management. It also presents opportunities for growing such markets, for example through fully integrated air bus services at both ends of the journey (remote regions as well as metropolitan areas) that are supported by the latest technology and IT systems.
