Secretaria de Aviação Civil - PSOs in France

Ministère de l'Écologie, du Développement durable et de l’Énergie
Direction générale de l’Aviation civile
Presentation of the policies and
regulations put in place in
France and Europe, in order to
develop regional routes
Emmanuel ROCQUE
French civil aviation authority
Cooperation Americas
03 March 2015

PLAN
1. Regional routes in France are mainly developed under
the « Public service obligations » framework and depend
on European rules
2. French overseas territories propose a more specific
regime, such as Guyana, French Polynesia or New
Caledonia

INTRODUCTION

The office of French carriers and
public intervention
• Part of the Air transport directorate within the French
civil aviation authority
• Licencing authority for French carriers
• In charge of the approval of operating programmes of
French carriers (scheduled and charter flights)
• In charge of PSOs concerning France
• Team of 9, approx. 50% working on PSOs (specification,
imposition and financial management)

PSO framework is the main
axis but some particular cases need to be
focused on
• PSO regime is a combination of European and French
rules
• The main goal is to support routes on a territorial
development planning approach, introducing frequency,
regularity and / or continuity of service criterias.
• When private initiative does not exist for cost
effectiveness reasons, public support may exist in order
to balance economic profitability
• Among other particular cases concerning overseas
territories, French Guyana could probably be the most
similar to Brazilian PDAR plan (individual support).

1. Regional routes in France are mainly developed
under the « Public service obligations » framework
and depend on European rules

1.1 What are PSOs?
• Defined at article 16 of regulation n°1008/2008
• PSOs are a set of operating norms imposed on a certain route, justified
by thin routes, peripheral or development region. They must be :
– Transparent  explicit and published in official journals
– Non-discriminatory  applies equally to every carriers operating the
route
• They specify the minimum requirements for air services operated on
the route in terms of :
– Frequency
– Stop-overs
– Aircraft seat capacity
– Schedules
– Continuity of service
– Fares, sometimes

1.2 PSO in Europe
Source : European commission, June 2014

1.2 PSO in Europe
Source : Commission européenne, juin 2014

1.2 PSO in Europe
Open = PSO without any public compensation ; Restricted = Public compensation

1.2 PSO in Europe

1.3 PSOs in France
• 42 routes on which PSOs are imposed
– 12 routes between Corsica and mainland France
– 4 routes between overseas departments and mainland France
– 5 routes within the overseas department of French Guyana
– 3 routes between Strasbourg and three Member States’ capital cities
– 18 routes within mainland France
• A number constantly evolving
– Crisis of the regional air transport
– Imposition of PSOs on request of local authorities
– PSOs expire if no scheduled air service has been operated during a period
of 12 months on the route
• Under additional French regulation (taken in May 2005)

1.3 PSOs in France
+ PSOs within French Guyana (subs.)
+ PSOs between mainland France and overseas departments (non subs.)
PSOs on radial routes, subsidized / non subs.
PSOs on transverse routes, subs. / non subs.
PSOs between Strasbourg and MS capital cities (subs.)
PSOs on Corsica routes (subs.)

Imposition of PSOs
• Local authorities designate a lead authority
• This lead authority prepares with the DGAC office:
– Draft specifications for the PSO
– A file justifying the need for PSO and the
specifications
• Several meetings are held to adjust both
documents

1.4 Justification of the necessity
of PSO on a route
• Criteria from regulation 1008/2008 for imposing
PSO on a route:
– route serving a peripheral or development region
– thin route being considered vital for the economic
and social development of the region which the
airport serves

of PSO on a route
• Justification file must demonstrate the need for air
services on the envisaged route
– Evidence that the region served is a peripheral region
• Geographical obstacles (mountains, water, etc.), distance and time to
reach major cities
– Evidence that the region served is a development region (e.g.
convergence regions  in France, applies to the overseas
departments)
– Evidence that the route is thin…
• Statistics of passengers on the route
– … and vital
• Existing economic relations between the two regions served
• Need for international connectivity
• Vital need for the economic activities using the route
• Poor performance of other transport modes or routes from neighbouring
airports

Type of justifications in Europe

of PSO on a route
• Ex.: recent request from Conseil Régional de
Bourgogne concerning Dijon-Toulouse and Dijon-
Bordeaux

of PSO on a route

1.5 Justification of the PSO
specifications
• Criteria for the specifications of a PSO:
– PSO imposed only to the extent necessary to ensure
on that route the minimum provision of scheduled air
services (proportionality)
– Standards which air carriers would not assume if they
were solely considering their commercial interest
(market failure, lack of private initiative)

specifications
• Justification file must demonstrate that:
– The envisaged PSO is in adequacy with the need of users…
• Studies on the number and type of travellers likely to use the route
• Needs in terms of frequency, continuity, schedules
– …and the abilities of carriers!
• Contacts with several carriers likely to operate the route
– No carrier intends to operate with services meeting the
needs of the region served
• Past initiatives have been abandoned?
• Subsidized services (start-up aids)?

specifications
[…]
[…]
[…]

1.6 Publication of the PSO
Ex.: the Dijon-Toulouse route

1.6 Publication of the PSO
• Information notice sent to the European Commission
• Note to the Commission giving the main justifications
for the PSO
• The office remains available for any questions from the
Commission

1.7 Public compensation is strictly
conditioned (public tender process)
• As specified at articles 16 and 17 of regulation
1008/2008:
– If no Community air carrier has commenced or can
demonstrate that it is about to commence sustainable
scheduled air services on a route in accordance with the PSO
which has been imposed on that route, the MS concerned
may limit access to the schedu
– led air services on that route to only one carrier for a period
of up to four years, after which the situation shall be
reviewed.
– The right to operate the services referred to in paragraph 9
shall be offered by public tender.
– The MS concerned may compensate an air carrier which has
been selected for adhering to the standards required by a
PSO imposed

French remote territories propose a more specific
regime, such as Guyana, French West Indies, French
Polynesia or New Caledonia

2.1 FINANCING PSOS ROUTES IN FRANCE:
THE CASE OF GUYANA ROUTES
• Social aids
– On PSOs routes within French Guyana
– For 2 categories of passengers
» Inhabitants of the towns linked by the PSO routes to
Cayenne
» Other inhabitants of Guyana (non residents cannot
benefit from the aids)
– Financed by local authorities (subsidized by the State)
– Direct subvention on airline ticket
– Contributions for 2011 : around 5,87 M€
» State : around 1,73 M€
» Local authorities : around 4,14 M€
 administrative contracts
» Between the local authority and air carrier(s)
» Between the local authority and the State
State aid:
» notified to the European Commission

THE CASE OF GUYANA ROUTES
• Social aids
– Major advantage:
Direct subvention on airline ticket is more visible for
PAX
− A few drawbacks:
 Necessary to identify people living in Guyana from
other people: a resident card is shown before
boarding
 Difficult to plan costs accurately on a yearly basis
(otherwise maximum have to be fixed, which is the
position of Ministry of finance and DGAC)  Guyana
territory has to compensate
 Creates “addiction” , difficult to stop or to make
changes

THE CASE OFFRENCH OVERSEAS
TERIITORIES
• French Antilles (West Indies) and La Réunion (Indian ocean) :
− PSOs exist and consist of capacity or price tickets conditions to
some categories of PAX
− These PSOs are not “restricted” but “open” : no public spending
on routes to compensate operations because they are cost effective
− Different aids not relying on PSO regime exist and represent
about 18 M € (Martinique and Guadeloupe) and 39 M € for La Réunion,
principally paid by Minister of overseas territories.
• French Polynesia and New Caledonia
− No PSO
− Different aids exist: 4,5 M€

2.3 PUBLIC SUPPORT : FIGURES
Routes « PSO
restricted »
Pax (2013) Public
compensation
in M€ (State)
Public
compensation
(local territory)
Public
compensation
in M€ (Total)
France
(metropolitan)
+ Saint Pierre
386 482
25 057
10,919
2,1
13,484 24,404
2,1
Madrid / Amsterdam/
Prague- Strasbourg
(EU Parliament)
89 452 3,231 0,370 3,6
Corsica 2 090 777 75 75
French Guyana
(PSO & social aids) 37 155 1,675 3,798 (+ 1,7) 5,474 (+1,7)
French overseas
territories (public
funds, but not
considered as a
PSO restricted)
47,8 21,95 (La Réunion) 69,75
TOTAL 2,6 M (PSO
restricted)
18 (PSO restricted) 19,35 (PSO
restricted),
94,35 including
Corsica
112,3 (PSO
restricted)
182 M€ in 2013
including all public
funds

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