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

Megersa Abate, Panayotis Christidis and Alloysius Joko Purwanto

Journal of Air Transport Management, 2020, vol. 89, issue C

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.

Keywords: Air transport; Aviation; COVID-19; Public policy; Privatisation; Liberalisation; Connectivity (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.jairtraman.2020.101931

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