Abstract
Aviation policy makers are faced with the challenge of facilitating growing air travel in such a way that it meets environment objectives and the need to provide socially necessary air services. Various incentives have been offered to encourage the launch of new air routes or sustain existing services, such as public service obligations and the Route Development Fund. This paper provides an overview of an independent evaluation of the funding mechanism in Scotland and highlights the difficulties faced analysing the effects of the scheme and challenges faced by policy makers in making robust policy intervention decisions, given the uncertainty surrounding their effects. The results suggest that the Fund has significantly increased passenger flows and travel conditions for business and leisure passengers, and increased the gross value added impact to the wider Scottish economy.
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