In this paper, the author examines the background of government intervention in the airline industry due to the grounding forced by the coronavirus disease 2019 (COVID‐19). Political involvement can mean assets and drawbacks. In the end, it will be interesting how the government‐airline relationship will evolve in the post‐pandemic phase.
Out of the blue, the black swan COVID‐19 circles planet earth. Closure of borders and travel bans spread like supersonic expansion. The pandemic paralyses flying principles. Within days, many airlines around the globe ground their entire fleets and run into difficulties through no faults. Why do governments intervene in the airline business? IATA believes it is the only solution As long as travel bans exist, it will be almost impossible for passenger airlines to connect countries and continents again. The author provides a critical evaluation of some airlines in different countries and continents. It remains questionable which airlines can make the journey through the crisis.
Table of Contents
1 INTRODUCTION
2 BACKGROUND OF GOVERNMENT INTERVENTION IN THE AIRLINE BUSINESS SINCE THE COVID-19 CRISIS
2.1 Does government support work?
2.1.1 Airlines in Europe
2.1.2 Situation in Africa
3 THE COVID-19 SITUATION
3.1 Why is government support crucial?
3.1.1 Financial support
3.1.2 Business Continuity
3.1.3 Global Domestic Product (GDP)
3.1.4 Air Connectivity
3.1.5 Secondary effects
3.1.6 Sustainability
3.2 Potential pitfalls of government support
3.2.1 Government management and strings attached
3.2.2 Independence means economic freedom
3.2.3 Distortion of competition
3.2.4 Burden of debt
3.2.5 Viable airlines
3.2.6 Reversal of the privatisation
4 THE GOVERNMENT-AIRLINE RELATIONSHIP OF THE FUTURE
4.1 Is a fresh start needed?
4.2 New Normal
4.2.1 Government-airline relationship
4.2.2 Europe
4.2.3 Domestic traffic
4.2.4 Government strategy
5 CONCLUSION
6 REFERENCES
6.1 Journals
6.2 Webpages
Objectives and Core Topics
This paper examines the influence of government intervention on the airline industry amidst the unprecedented challenges posed by the COVID-19 pandemic, focusing on the necessity of financial support versus the associated risks of state involvement.
- The necessity and implementation of government financial bailouts for airlines.
- Economic impacts of the pandemic on airline operations and global connectivity.
- The potential pitfalls of state intervention, including market distortion and loss of corporate independence.
- Strategic shifts required for the future government-airline relationship in a post-pandemic environment.
Excerpt from the Publication
3.1.2 Business Continuity
The financial support guarantees business continuity. Airlines are organisations with complex systems. Business continuity is a crucial factor as a total shutdown means economic and infrastructural collapse. The continuity ensures to maintain the workforce during all phases of the crisis. The workforce is an essential resource and asset and decisive in the moment the organisation ramps up the system again.
Chapter Summaries
1 Introduction: Provides an overview of the paper's scope regarding government intervention in the airline industry due to COVID-19 and the evolving relationship between the two.
2 BACKGROUND OF GOVERNMENT INTERVENTION IN THE AIRLINE BUSINESS SINCE THE COVID-19 CRISIS: Evaluates whether government support effectively assists airlines by reviewing specific case studies in Europe and Africa.
3 THE COVID-19 SITUATION: Analyzes the economic impacts of the pandemic and argues why government intervention is crucial while highlighting potential risks.
4 THE GOVERNMENT-AIRLINE RELATIONSHIP OF THE FUTURE: Discusses the necessary resets in government-airline relations and the emergence of a "new normal" regarding policy, coordination, and sustainability.
5 CONCLUSION: Synthesizes the finding that while government aid acts as a vital lifeline, it must be balanced to maintain airline independence and long-term competitiveness.
6 REFERENCES: Lists the academic journals and digital resources used to support the research findings.
Keywords
COVID-19, Airline Industry, Government Bailout, Financial Support, Business Continuity, Global Domestic Product, Air Connectivity, Sustainability, Competition, Privatisation, Economic Freedom, Government Strategy, Aviation Safety, Market Recovery, Government Intervention
Frequently Asked Questions
What is the primary focus of this paper?
The paper explores the role of government intervention in supporting airlines during the COVID-19 pandemic, analyzing the necessity of state aid and the associated long-term consequences for the industry.
What are the central themes discussed?
The core themes include the effectiveness of financial subsidies, the preservation of business continuity, the importance of air connectivity for the global economy, and the potential pitfalls related to government management of private entities.
What is the author's primary research goal?
The goal is to determine how the relationship between governments and airlines will evolve post-pandemic and how states can provide support without compromising the viability and independence of airline organizations.
Which scientific method is applied in this study?
The author performs a critical evaluation of industry data, qualitative analysis of selected international case studies, and a review of contemporary literature and reports from organizations like IATA.
What topics are covered in the main section?
The main section covers the justification for bailouts, the economic impacts on GDP, potential risks like debt burden and distortion of competition, and the required strategic changes for the future of aviation.
Which keywords best describe this research?
Key terms include COVID-19, Airline Industry, Government Bailout, Business Continuity, Sustainability, and Public-Private Collaboration.
How does the author view the 'new normal'?
The "new normal" implies a more intense, regular, and collaborative relationship between governments and airlines, moving away from purely financial rescue toward standardized health, safety, and strategic frameworks.
What role do low-cost carriers (LCCs) play in the author's argument?
LCCs are cited as being more adaptable and less reliant on business travelers, which may offer them a competitive advantage in the post-crisis market compared to traditional legacy carriers.
- Quote paper
- Julia Werner (Author), 2021, Airline Business. The Role of Governments in Supporting Airlines in the COVID-19 Crisis, Munich, GRIN Verlag, https://www.grin.com/document/1248726
