30 May 2023: Last week, ERA members met in Brussels for an interactive workshop on Public Service Obligations and thin commercial routes to discuss, with representatives of the European Commission (DG MOVE and DG COMP), the lessons learned from the existing regulatory framework and how to improve it.

During the workshop, ERA airlines shared their concrete experience on the ground with the current PSO framework and explored alternative incentive schemes to support thin routes that fall outside the scope of the PSO.

ERA carriers rely on PSOs to provide essential connectivity, especially for communities in remote areas which often do not have direct access to essential services. The current PSO framework is a critical tool to ensure essential connectivity, but it is not the solution for the long term development of European regions. The current rules are not flexible enough, and do not allow for investment and long-term growth. In this respect, more power should be allocated to the region and/or city involved in the PSO process and there should be more clarity among national authorities in the interpretation of the PSO guidelines.

Maintaining these routes after the COVID-19 crisis is critical for the future viability of regional airlines and the services they provide to local communities. Without appropriate regulatory support and new tools, thin routes could disappear in the long term and most of them are already not profitable enough. The need to ensure regional connectivity for local communities should therefore be prioritised over the need for competition within the EU Single Market.

The 2014 Aviation Guidelines can be deployed to support regional connectivity, but require significant improvements as well (the conditions for start-up aid are too strict). A dedicated EU tool should be established to enable public authorities to support airlines in assuming the financial risks of opening new routes.

The EU environmental objectives should be balanced with the financial reality faced by regional airlines, as the latter cannot alone bear the burden of the upcoming EU regulations (Ff55 implementation) and invest in new green technologies. Decarbonisation is not the only dimension of sustainability for PSO routes and the social aspect of connectivity and growth of the region should also be taken into account. The five-year maximum period for PSO contracts is not enough to invest in new disruptive aircraft and should be therefore prolonged.

In the coming months, ERA will continue its efforts in advocating for a revision of the Air Services Regulation No 1008/2008, to make the current PSO framework more flexible and efficient.