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Sustainability 2017, 9(8), 1295; doi:10.3390/su9081295

Subsidies in Aviation

1
School of Business and Economics, Linnaeus University, 39182 Kalmar, Sweden
2
Service Management and Service Studies, Lund University, 25108 Helsingborg, Sweden
3
Western Norway Research Institute, 6851 Sogndal, Norway
4
Worms University of Applied Sciences, Department of Tourism and Travel Management, 67549 Worms, Germany
5
School of Business & Tourism, Southern Cross University, Lismore 2480, New South Wales, Australia
*
Author to whom correspondence should be addressed.
Received: 4 July 2017 / Revised: 18 July 2017 / Accepted: 21 July 2017 / Published: 25 July 2017
(This article belongs to the Special Issue Transport Policy)
View Full-Text   |   Download PDF [265 KB, uploaded 31 July 2017]

Abstract

Relatively little attention has been paid to the existence of subsidies in aviation. As the sector’s importance for economic development is often highlighted, this paper seeks to provide a conceptual overview of the various forms of subsidies in aviation, as a contribution to a more holistic understanding of economic interrelationships. Based on a purposive sampling strategy, existing forms of subsidies are identified and categorized along the value chain. Focus is on industrialized countries, for which more information is available. Results indicate that significant subsidies are extended to manufacturers, infrastructure providers and airlines. These contribute to global economic growth related to aviation, but they also influence capacity in global aviation markets, strengthen the market position of individual airlines, and create conflicts between airlines and the countries they are based in. While the actual scale of subsidies cannot be determined within the scope of this paper, it provides a discussion of options to empirically assess the effects of aviation subsidies on market outcomes. Finally, general conclusions regarding the impact of subsidies on the overall sustainability of the air transport sector are drawn: These include rapidly growing capacity in the aviation system, economic vulnerabilities, and negative climate change related impacts. Results call for a better understanding of the distribution, character and implications of subsidies. View Full-Text
Keywords: aviation; airlines; airports; economic effects; state aid; subsidies aviation; airlines; airports; economic effects; state aid; subsidies
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Gössling, S.; Fichert, F.; Forsyth, P. Subsidies in Aviation. Sustainability 2017, 9, 1295.

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