ABSTRACT
This chapter provides an overview of the types and definitions of subsidies, their relevance along the aviation value chain and the potential justifications for granting subsidies. It focuses on subsidies granted in the European Union and the changing approach of European competition authorities towards subsidies. Subsidies are widespread along the entire aviation value chain. Aircraft manufacturers benefit from various subsidies, which have led to several World Trade Organization cases. Infrastructure providers – and in particular airports – often benefit from subsidies. Many subsidies favouring the air transport industry are linked to regional policy objectives. Within Europe, the overall fiscal framework for the air transport industry does not differ much between member states. In many countries, specific programmes for supporting air transport services to remote regions exist, such as in the United States and in Canada. A specific type of usually unprofitable airports emerged after the end of the Cold War in Europe.
