Many air carriers like ______ for incentives.

• A. Minimum Revenue Guarantees
• B. Tax Credits
• C. Subsidies
• D. Loans

Answer: (A)

Incentive tools for adding or sustaining air service often rely on providing revenue certainty to the airline. A minimum revenue guarantee works this way: the sponsor promises the airline a floor level of revenue for a defined route and period. If the actual revenue falls short, the sponsor pays the difference, so the airline’s earnings aren’t tied entirely to demand swings. This makes operating the route financially viable and lowers the risk the carrier faces when markets are uncertain, which is why airlines value it as an incentive.

Tax credits reduce taxes but don’t guarantee any specific route revenue. Subsidies can help, but they’re typically broader and may not guarantee a per-route revenue floor. Loans supply capital but don’t offer revenue protection or an incentive tied to route performance, and they come with repayment requirements.