https://ec.europa.eu/transport/sites...elines-pso.pdf
In the absence of case law from the European Court of Justice, the European Commission issued Interpretative Guidelines last year in respect of PSOs - see above link. They make it clear that future Court of Justice decisions might overturn some of the guidelines.
Of course, it’s not just a case of a government deciding that route A-B would be a good one for a PSO. There have to be reasons that satisfy the legislation and the interpretation.
As regards Cardiff-London, on the face it rail connectivity, soon to be improved even more with electrification, would make an air PSO extremely unlikely. The rail journey is under three hours, well under in fact, and it’s probable that the half-hourly frequency would not satisfy the principle for an air PSO.
Below are the relevant EC interpretations on other transport, particularly rail.
38.
PSOs should only be imposed insofar as other transport modes cannot meet the transport needs of the region concerned. Account should be taken mainly of services offered by train, ferry and coach operators. The adequacy of the services should be assessed, in particular, with regard to their frequency, journey times, departure times and to possible connections to other important destinations, in particular long-haul travel options. The possibilities of individual (car) transport should also be explored, having regard in particular to the journey times by road.
39.
Particular consideration should be given to train services that serve the envisaged route with a travel time of less than three hours. This refers to both high-speed train services and other train services. Where such train services provide sufficient frequencies for the mobility needs of the concerned region, PSOs should in principle not be imposed on air services. Exceptionally, such PSOs could be considered however, in particular if the train services do not allow adequate connections to medium- and long-haul air services (e.g. inadequate connection between the train station in the region concerned and the airport offering medium- and long-haul services or absence of alternative travel options to connect to the long-haul destinations, including indirect flight options). The assessment needs to be carried out on a case-by case basis.
The UK government seems anxious to be sure that this is not simply a back-door method of axing APD on the routes in question. There is clearly more negotiating to be done before the UK government is willing to send the proposals to the EC.
A Welsh Government spokesperson said today, ”We have received the response from the UK Government setting out a number of challenges to our proposals. We want to work with the UK Government to allow us to be able to provide this connectivity across the UK which will be especially important post Brexit and to help re-balance the UK economy.”
A UK spokesperson said today, “Our aviation strategy will consider wider use of PSOs and we will use our upcoming Green Paper and consultation as an opportunity to fully work up the policy options, ensuring it is fit for the whole of the UK.”
The routes that the Welsh Government would like to see as PSOs are Cardiff to Manchester, Leeds-Bradford, Humberside, Glasgow, Aberdeen, London, Newquay, Inverness and Norwich. Manchester is reported to be their number one target.