EUROPEAN AND AMERICAN APPROACHES TO AIR TRANSPORT LIBERALIZATION - SOME IMPLICATIONS FOR SMALL COMMUNITIES

This paper looks at the impact of the European Union (EU) 'Third Packa ge' of Liberalisation measures on small communities. The liberalisatio n package came into effect on 1 January, 1993 and allows for free entr y on intra-European routes and freedom by carriers to set passenger fa res and cargo rates. It is shown that in the case of the US, deregulat ion there produced many benefits to the travelling public. For small c ommunities, the detrimental impacts of competition, namely a focus by carriers on the larger centres, were lessened with the introduction of the 'Essential Air Services Programme' in 1978. This programme ensure d that a basic level of air services was provided to designated small communities even if subsidies were required. The EU liberalisation doe s not include administrative or financial provision for an equivalent programme. The case of the Irish regional airports is presented to hig hlight the detrimental impact of competition and liberalisation on sma ll communities. These regional airports are vital to economic developm ent in several peripheral regions of Ireland but are experiencing a re duction or removal of air services because carriers wish to focus on t he more lucrative high density intra-community routes. A strong case i s put forward for an EU-wide Essential Air Services Programme, so that the benefits from the EU-wide liberalisation package may be extended in a fair and transparent manner to small communities.