 COVID-19 and bailout policy: The case of Virgin AustraliaYahua Zhang and Anming Zhang Transport Policy, 2021, vol. 114, issue C, 174-181 Abstract: The impact of COVID-19 on air transport is unprecedented and some well-known airline brands may disappear as a result. Governments around the world have responded swiftly to cushion the financial impact by offering direct wage subsidies, tax relief, loans, etc. This paper explores the government's appropriate responses to failing airlines' bailout request by examining the case of Virgin Australia. Following the bailout policy principles established in the literature, we suggest that bankruptcy protection should be considered as the first solution to a failing carrier. A bailout decision should be guided by a set of principles and procedures, which should not be taken lightly. Our analysis also shows that the government cannot take a hands-off approach in the absence of private lenders and investors, as the costs to consumers and regional residents would be huge if the carrier could not get through the COVID-19 pandemic. A minimum level of assistance with conditions might be needed to maintain market competition. Keywords: COVID-19 pandemic; Airline bailouts; Empty core; Qantas; Virgin Australia (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:trapol:v:114:y:2021:i:c:p:174-181 Ordering information: This journal article can be ordered from DOI: 10.1016/j.tranpol.2021.09.015 Access Statistics for this article Transport Policy is currently edited by Y. Hayashi More articles in Transport Policy from Elsevier |
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