Government support to airlines in the aftermath of the COVID-19 pandemic

Abstract

This paper assesses government support measures to the air transport sector following the outbreak of the coronavirus disease (COVID-19) pandemic from two points of view. First, it explores the factors that shape governments’ willingness to support airlines. This is followed by a discussion on the various types of support that may be provided and how country-specific parameters influence the choice of measures. Second, it analyses the implications of government support in three dimensions relevant to air transport policy: competition and liberalisation, airline ownership and control, and environmental sustainability. The analysis suggests that most governments give a high priority to maintaining air transport connectivity in order to protect economic activity and jobs, in aviation itself and in related sectors such as tourism. The trade-off between ensuring connectivity and maintaining competition after the COVID-19 pandemic is a challenge with several political and economic dimensions. The re-orientation of public policy in the aftermath of the pandemic may limit the relative importance of the policy priorities that shaped the evolution of the air transport sector before the crisis, especially those related to climate change and the environment. The role of government and public authorities at all levels – especially the type and duration of measures affecting transport operations – will be crucial for the future development of the aviation industry.

COVID-19 pandemic and air transportation: Successfully navigating the paper hurricane

“…Therefore, several recent studies analyze the impact of COVID-19 and government subsidies on airlines; see Table 9 for a summary. Generally speaking, the goal is to find a trade-off between ensuring connectivity and maintaining competition with several economic and political dimensions ( Abate et al, 2020 ). Particularly, it is questionable whether ongoing re-orientation of public policies helps to reach previously-set sustainability criteria (e.g., regarding climate change and environment), unless airlines are specifically bound to such conditional help ( Goessling et al, 2020 ).…”

The Impact of a Global Crisis on Areas and Topics of Tourism Research

“…Insurance and subsidy programs for employees; support the survival of the hotel and airline industry [3,[13][14][15][16][17] Play the function of the informal sector Cooperation between the informal sector and government departments; provide microfinance; provide bank insurance [18,19] Prioritize actions Quick response to the tourism industry in crisis [13,15] Formulate public policy Prohibit or restrict the arrival of giant cruise ships and promote the development of small cruise ships; issue policies to support the aviation and hotel industry; government supervision of policy implementation [12,20,21] Table 5. Government crisis management: after the crisis.…”

“…Seek support from government and non-government departments and actively communicate with them [16,17] Fulfill corporate social responsibility…”

“…As a response to this epidemic, government support is likely to strengthen the role of national advocates and enable them to gain a higher market share, thereby harming smaller players who cannot attract much private or public funding, according to Forsyth et al [17]. In this regard, Abate et al [16] proposed that the partial or full nationalization of airlines with government support may be positive because it may be a lever to introduce social and environmental goals. In the event of economic disruption, negotiation and coordination are essential for more effective implementation of measures.…”

Reflections on the SARS-Covid-2 pandemic after one year: predictable, preventable but inevitable: an ecologist’s perspective

“…Instead, profits are ploughed into investor's portfolios. Large corporations in the travel sector, such as airlines, were among the first to seek government support when the pandemic led to lockdowns, stricter border controls and reduced business (Abate et al 2020;de Rugy, Leff 2020). Ironically, as the pandemic has been tearing through most nations across the world, the number of billionaires also continued to increase (Collins et al 2020;Kelly 2020).…”