This is just an IATA (International Air Transport Association) code. IATA codes are used in aviation to identify and differentiate airports. That’s why a Perugia Sant Egidio Airport flight would often be abbreviated as a PEG flight.
If you book a flight to Perugia, you will be flying into Sant Egidio, which is the city’s only airport. Perugia Sant Egidio (PEG) is located 10.3 km from the center of Perugia.
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