In a new appendix to their report on the economic impact of Europe’s air passenger rights, Dr. Hinnerk Gnutzmann and Dr. Piotr Śpiewanowski find that EC261 does not negatively impact regional viability. In fact, it serves as a vital quality safeguard where market competition is lacking.
Key takeaways from their analysis of European regional flights:
- Monopoly routes are mainstream: Routes operated by just one airline are not a peripheral exception; they account for 35% of all flights within the EU.
- EC261 incentives reliability: On monopoly routes, where competition is lacking, it is EC261 that provides the incentive to maintain operational reliability and establishes a minimum standard of service.
- The cost is minimal: The financial burden of delay compensation remains remarkably low. For most routes examined its cost impact was consistently estimated at under €1 per passenger.
- Costs are lower on Regional & Monopoly routes: Counter-intuitively, monopoly routes incur lower compensation costs (€0.65) than highly competitive “oligopoly” routes with 3+ carriers (€0.77)
- Public Service Obligation (PSO) routes are even less: On Public Service Obligation (PSO) routes, costs drop to just €0.42 per passenger due to superior reliability (a 0.30% long-delay rate vs. 0.44% on commercial routes).
Passengers living in periperal regions are often particularly dependent on air travel for reliable connections with the world. The appendix concludes that EC261 successfully protects such passengers with the fewest travel options, without threatening the economic viability of the routes.
Read the full report: Air Passenger Rights at the Crossroads: Economic Impact of the Proposed EC261 Reform
Appendix A: Regional Connectivity and Competition begins pg 31.
