State Ownership of Flag Carriers: Its Stability Amidst the COVID-19 Pandemic

Authors : Michael Lawrence C. Ulep, CHP

Volume/Issue : Volume 5 - 2020, Issue 11 - November

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The Novel Coronavirus (COVID-19) has caused a global dilemma as it created major disruptions not just the health of the people, but also to the economy of the countries. One of the industries that has a major impact is the airline industry as they are one of the essential means of transportation around the world. Since countries have closed their borders, the airline industry was also grounded for several months, leading to financial loses, and seeking for assistance. Because of this, airlines are now in the midst of survival, questioning their ownership if they would maintain as a private airline or a state-owned, and vis-àvis. Airline M is a privately-owned airline that is faced with financial losses and is barely surviving with their current phase. As for Airline G, a state-owned airline, is also facing even more financial losses as they have been struggling to survive even before the crisis. Both airlines are now under restructuring their organization and entering equity injections for them to survive and not permanently close. For Airline M, realigning their costs should be one of their priorities for them to have a more efficient and effective in increasing their utilization of costs, simplifying the processes, and invest in automation. Airline G’s management should consider the government authorities to not get involved in the decision-making of the airline as this might lead to different political issues. Ultimately, whether they will be state-owned or privately owned, the management of the airline will play a huge role in the survival of the airlines during this global crisis as not all strategies can be implemented for their betterment. Not just the management themselves, but every stakeholder would have to play their own part as everyone should work together for them to endure this pandemic.

Keywords : State Ownership, Private Ownership, Flag Carriers, COVID-19, Airlines.


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