ABSTRACT
Public subsidies have been a common feature of the airline industry for many years. Historically such aid has usually taken the form of support from governments to national 'flag carriers' to finance restructuring. However, with the liberalisation of air transport, such aid is largely a thing of the past. This chapter looks to the 'future' of public subsidies in the air transport sector by considering the economic aspects of subsidies received by airlines for the use of regional airports. The key precedent in this area is the European Commission's findings with regard to the arrangements between Charleroi Airport and Ryanair, and the subsequent guidelines published by the Commission on the provision of public aid to airports and airlines. Although Ryanair appealed and won the case (European Court of First Instance, 2008) on legal grounds that the Commission did not treat the region with its airport as one entity the economic reasoning of the European Commission on airport subsidies remained largely the same.
