Flag carrier

A flag carrier is a transportation company, such as an airline or shipping company, that, being locally registered in a given country, enjoys preferential rights or privileges, accorded by the government, for international operations. It may be a state-run, state-owned or private but state-designated company or organization. Flag carriers may be known as such due to maritime law requiring all aircraft or ships to display the state flag of the country of their registry.^[1]

A flag carrier (if it is a certificated airline rather than a holding company, conglomerate, or multinational private equity firm) may also be known as a national airline or a national carrier, although this can have different legal meanings in some countries.

Background

The term "flag carrier" is a legacy of the time when countries established state-owned airline companies. Governments then took the lead due to the high capital costs of establishing and running airlines. The heavily regulated aviation industry also meant aviation rights are often negotiated between governments, denying airlines the right to an open market. These Bilateral Air Transport Agreements similar to the Bermuda I and Bermuda II agreements specify rights awardable only to locally registered airlines, forcing some governments to jump-start airlines to avoid being disadvantaged in the face of foreign competition. Some countries also establish flag carriers for nationalist reasons, or to aid the country's economy, particularly in the area of tourism.^{[citation needed]}

In many cases, governments would directly assist in the growth of their flag carriers typically through subsidies and other fiscal incentives. The establishment of competitors in the form of other locally registered airlines may be prohibited, or heavily regulated to avoid direct competition. Even where privately run airlines may be allowed to be established, the flag carriers may still be accorded priority, especially in the apportionment of aviation rights to local or international markets. In the United States, for example, funding for international travel by government employees is restricted to "US flag air carriers" under the Fly America Act,^[2] however, this coincidental terminology should not be confused with traditional flag carriers.^{[citation needed]}

In the last decade, however, many of these airlines have since been corporatized as a public company or a state-owned enterprise, or completely privatized. The aviation industry has also been gradually deregulated and liberalized, permitting greater Freedoms of the air particularly in the United States and in the European Union with the signing of the Open Skies agreement. This has rendered the designation of "flag carriers" less important than it was in the past.^{[citation needed]}

The term is also used loosely to refer to any dominant or major airline sized carrier in a country, or in reference to a mainline carrier with a history of a state sponsored legacy of airline service, even long after their privatization.^{[citation needed]}

List of flag-carrying airlines

The chart below lists airlines considered to be a "flag carrier", based on current or former state ownership, or other verifiable designation as a national airline.

Country or Region	Airline	Details of current state-ownership	Details of former state-ownership	Notes
Afghanistan	Ariana Afghan Airlines	Majority[3]
Algeria	Air Algérie	Majority (95%)[4]		The company will be privatized between 2012 and 2013.
Argentina	Aerolineas Argentinas	Majority (99.4%) [5]
Australia	Qantas	None	State-owned until 1992 [6]
Azerbaijan	Azerbaijan Airlines[citation needed]
Bangladesh	Biman Bangladesh Airlines	Public limited company	State-owned until 23 July 2007
Bulgaria	Bulgaria Air	Public limited company	State-owned	Majority (59.58%)
Bosnia and Herzegovina	B&H Airlines[7]	Majority (50.93%)	99.93% prior to 2008	Sold 49% to Turkish Airlines in 2008
Cambodia	Cambodia Angkor Air	Majority (51%)[8]
Canada	Air Canada	None	State-owned until 1989[9]
China	Air China	None	State-owned until 2004[10]
Colombia	Avianca	None
Costa Rica	Lacsa	State-owned	Owned by Taca
Denmark	Scandinavian Airlines[citation needed]	Joint-Venture[11]
Estonia	Estonian Air	Estonian government owns 90% and SAS Group 10% [12]
Finland	Finnair	Finnair's major shareholder is the Finnish government with a 55.8 per cent holding [13]
France	Air France	Minority (~20%)[citation needed]
Germany	Lufthansa	None	German Government sold remaining 35,68% in 1997 [14]
Greece	TAE Greek National Airlines[15]	None	State-owned between 1951 and 1957	Purchased by Aristotle Onassis and renamed Olympic Airways
	Olympic Airways/Olympic Airlines[15]	None	State-owned between 1975 and 2009	Purchased by Marfin Investment Group and renamed Olympic Air
Hong Kong	Cathay Pacific	Cross Holding with Air China 17.5%[16] Air China increased its holding another 12.4% to 29.9% [17]		Endorsed by Brand Hong Kong (trademark owned by Hong Kong SAR),[18] trademark is visible on all Cathay Pacific Airplane [19]
	Dragonair	Holding by Cathay Pacific in 100%		Endorsed by Brand Hong Kong (trademark owned by Hong Kong SAR),[18] trademark is visible on all Dragonair airplane same as Cathay Pacific
Hungary	Malév	Majority (95%) [20]
India	Air India	State owned [21][not in citation given]
Indonesia	Garuda Indonesia	Majority
Ireland	Aer Lingus	Irish Goverment 25.4%[citation needed]
Iran	Iran Air	100% state-owned [22]
Israel	El Al	Holds no controlling stake, though Government of Israel does hold some share	State-owned until June 2004	June 2004 The airline ceases to be a government company – After the purchase of stocks and exercise of options by the public, the State's holdings in the company declined to less than 50% and the airline ceases to be a government company, becoming a mixed company (as defined in the Law of Government Companies). [23]
Italy	Alitalia	Compagnia Aerea Italiana	State-owned until 2008[citation needed]
Japan	Japan Airlines	None	State-owned until 1987
Kenya	Kenya Airways	Minority (23%)[24]
Kuwait	Kuwait Airways[25]	Majority (65%); 35% to be privatised[25]
Lebanon	Middle East Airlines
Malaysia	Malaysia Airlines[26]
Mexico	Aeroméxico	None	State-owned until 2007
Malta	Air Malta	Majority [27]
Mongolia	MIAT Mongolian Airlines	100% [28]
Netherlands	KLM		Merged with Air France[29]
New Zealand	Air New Zealand	Majority [30]
North Korea	Air Koryo	State-owned[31]
Norway	Scandinavian Airlines[citation needed]	Joint-Venture[11]
Poland	LOT Polish Airlines	Majority (67.97%)[32]
Latvia	Air Baltic	Majority (51%)[33]
Philippines	Philippine Airlines[34]
Pakistan	Pakistan International[35]
Portugal	TAP Portugal	Full [36]
Romania	TAROM	Majority (95%) [37]
Russia	Aeroflot	Majority (51%)		de facto flag carrier[citation needed]
Singapore	Singapore Airlines	54.5% through Temasek Holdings [38]
South Korea	Korean Air[39]	None[40]
Spain	Iberia	Minority (5%)[41]
Sweden	Scandinavian Airlines[citation needed]	Joint-Venture[11]
Taiwan	China Airlines			Sold shares to public in 1993[42]
Thailand	Thai Airways International	Majority (51%)		Sold shares to public starting in 1991[43]
Trinidad and Tobago	Caribbean Airlines	Majority (84%)		16 percent owned by the Government of Jamaica[44]
Tunisia	Tunisair
United Arab Emirates	Etihad Airways[citation needed]	State-owned
	Emirates[citation needed]	State-owned
	Air Arabia[citation needed]	Minority (45%)
United Kingdom	British Airways	None	Privatised in 1987 [45]
Uruguay	PLUNA[46]
Vatican City	Alitalia			Typically the Pope flies on a chartered Alitalia Jet. The Pope's flight actual callsign is "Volo Papale" (papal flight, in Italian) followed by a serial number. [47]
Venezuela	Conviasa[citation needed]	State-owned
Vietnam	Vietnam Airlines[48]
Zimbabwe	Air Zimbabwe[49]	Full[50]

References

Transport portal

External links

• International Air Transport Association Organisation formerly responsible for managing air services agreements and international fares.
• US Maritime Administration