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jacobchoi
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Renationalisation of airlines being a trend.

Wed Mar 18, 2020 6:01 am

I am sorry if this hasn't been covered in the coronavirus related thread. Upon discovering that AZ is about to be renationalised, I am almost certain that another string of airlines, perhaps less so in Europe and definitely not the US3 being renationalised. Those that i could think of as strong contenders include KE, TG, and as a long shot, AF as long as their unions are active.
 
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SCFlyer
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 6:28 am

ZL and QF in Australia are often mentioned as "contenders" for 'partial' nationalisation (or renationalisation in QF's case) in recent years. The former being one of the larger independent regional carriers with an aging fleet.
 
usflyer msp
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 7:01 am

TG is government owned like all the other South and Southeast Asian flag carriers
 
Blerg
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 7:10 am

But then why nationalize Korean Air and not Asiana? I mean both are struggling and both are quite big. Either one failing would leave a deep mark on South Korea. Maybe it would be wiser if they were both given funds and kept as is.
 
f4f3a
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 7:19 am

I find it funny how Norwegian and alitalia were looking at going bust now are most likely to survive as the state steps in
 
Blerg
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 7:23 am

f4f3a wrote:
I find it funny how Norwegian and alitalia were looking at going bust now are most likely to survive as the state steps in


Did anyone really expect AZ to go bust? Norwegian sure but Alitalia?
 
ITSTours
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 7:38 am

There will be no renationalization for both KE and OZ. S Korean government will not pursue it.
 
MRYapproach
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 7:38 am

I am curious about how the Asian airlines will cope with this.
Some will be re-nationalized, but only in terms of stock buys.
Some might be truly re-nationalized.
Some will die.
But many will find a way to pursevere thanks to accommodating governments quietly renegotiating terms of contracts.
 
VSMUT
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 8:24 am

jacobchoi wrote:
I am sorry if this hasn't been covered in the coronavirus related thread. Upon discovering that AZ is about to be renationalised, I am almost certain that another string of airlines, perhaps less so in Europe and definitely not the US3 being renationalised. Those that i could think of as strong contenders include KE, TG, and as a long shot, AF as long as their unions are active.


The circumstances are exceptional in this case. Things are so bad that it is no longer a matter of letting the weak players die. Even the strong players are likely to be killed in a matter of just a few weeks or months. If something isn't done, we will have no airlines at all after this crisis is over.
 
FluidFlow
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 9:02 am

VSMUT wrote:
jacobchoi wrote:
I am sorry if this hasn't been covered in the coronavirus related thread. Upon discovering that AZ is about to be renationalised, I am almost certain that another string of airlines, perhaps less so in Europe and definitely not the US3 being renationalised. Those that i could think of as strong contenders include KE, TG, and as a long shot, AF as long as their unions are active.


The circumstances are exceptional in this case. Things are so bad that it is no longer a matter of letting the weak players die. Even the strong players are likely to be killed in a matter of just a few weeks or months. If something isn't done, we will have no airlines at all after this crisis is over.


It would be an interesting scenario, if the whole world decides to let all the airlines fail. The moment the restrictions are liftet, a lot of aircraft and crew are available to hire. It would be a reset of the aviation market and all start from 0. Competition would be huge as most probably a lot of local carriers would emerge and fares would be low. Might be really good for the normal customer.

Of course this will not happen but it would be interesting to see.

From my point of view it would be good though to split the big players a bit and also in this sweep break up the TATL JV to bring back real competition into this market.
 
VSMUT
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Joined: Mon Aug 08, 2016 11:40 am

Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 9:05 am

FluidFlow wrote:
VSMUT wrote:
jacobchoi wrote:
I am sorry if this hasn't been covered in the coronavirus related thread. Upon discovering that AZ is about to be renationalised, I am almost certain that another string of airlines, perhaps less so in Europe and definitely not the US3 being renationalised. Those that i could think of as strong contenders include KE, TG, and as a long shot, AF as long as their unions are active.


The circumstances are exceptional in this case. Things are so bad that it is no longer a matter of letting the weak players die. Even the strong players are likely to be killed in a matter of just a few weeks or months. If something isn't done, we will have no airlines at all after this crisis is over.


It would be an interesting scenario, if the whole world decides to let all the airlines fail. The moment the restrictions are liftet, a lot of aircraft and crew are available to hire. It would be a reset of the aviation market and all start from 0. Competition would be huge as most probably a lot of local carriers would emerge and fares would be low. Might be really good for the normal customer.

Of course this will not happen but it would be interesting to see.

From my point of view it would be good though to split the big players a bit and also in this sweep break up the TATL JV to bring back real competition into this market.


It would be really interesting. Downside is that a lot of people would be unemployed for a significant period.
 
Amsterdam
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 9:08 am

Aegean, TAP will they be saved?
Air Europa?
Jet2?

What about Ryanair, Wizz and easyJet that operate out of many countries?
 
Amsterdam
Posts: 449
Joined: Thu Mar 17, 2011 12:52 am

Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 9:10 am

FluidFlow wrote:
VSMUT wrote:
jacobchoi wrote:
I am sorry if this hasn't been covered in the coronavirus related thread. Upon discovering that AZ is about to be renationalised, I am almost certain that another string of airlines, perhaps less so in Europe and definitely not the US3 being renationalised. Those that i could think of as strong contenders include KE, TG, and as a long shot, AF as long as their unions are active.


The circumstances are exceptional in this case. Things are so bad that it is no longer a matter of letting the weak players die. Even the strong players are likely to be killed in a matter of just a few weeks or months. If something isn't done, we will have no airlines at all after this crisis is over.


It would be an interesting scenario, if the whole world decides to let all the airlines fail. The moment the restrictions are liftet, a lot of aircraft and crew are available to hire. It would be a reset of the aviation market and all start from 0. Competition would be huge as most probably a lot of local carriers would emerge and fares would be low. Might be really good for the normal customer.

Of course this will not happen but it would be interesting to see.

From my point of view it would be good though to split the big players a bit and also in this sweep break up the TATL JV to bring back real competition into this market.


Governments want to save LH KL AF BA IB and some others. Not save them now and make them weaker after this crisis by breaking up the groups and JV’s.
That would make these airlines even weaker for any other crisis. Wouldnt make sense at all.

Thats even besides giving a huge part of the market away to state owned and supported arab turkish chinese airlines that will not let their airlines go bancrupt. Amazingly bad idea this.
 
mjoelnir
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 9:24 am

The USA government has already declared it will safe the USA airlines.

Is that nationalisation? I would make a difference between nationalisation and helping airlines through a crisis not of their making. The difference is, who owns the airline afterwards. The usual USA way is perhaps the most hypocritical. Using the taxpayers money to help a private corporation.
If the taxpayer provides the money, why should the taxpayer not own the result? It can always be sold again.
 
f4f3a
Posts: 616
Joined: Thu Jul 29, 2004 4:07 am

Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 9:30 am

I imagine it will be like the banks scenario as in uk where gov money bought out shareholders but they operated independently . When times were better they divest themselves of these shares and return companies back to private hands
 
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SR380
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 9:31 am

The CEO of Swiss International Airlines, which belongs to the Lufthansa group, recently mentioned that he expected the Swiss Government to financially help them out. As a Swiss national, I hope that Federal Council will step in. But only to buy majority shares, which could only be benefit in the long term if LX is still managed as it is.
 
jacobchoi
Topic Author
Posts: 126
Joined: Fri Feb 21, 2014 12:32 am

Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 10:02 am

I might be quite simple minded here but as OS is grounded, i presume it's LH group's decision. But at the end of the day, it is Austria's registered planes and workers. If there is to be a financial package, how could it be benefitial for them if LH keeps them shut?
 
FluidFlow
Posts: 723
Joined: Wed Apr 10, 2019 6:39 am

Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 10:07 am

SR380 wrote:
The CEO of Swiss International Airlines, which belongs to the Lufthansa group, recently mentioned that he expected the Swiss Government to financially help them out. As a Swiss national, I hope that Federal Council will step in. But only to buy majority shares, which could only be benefit in the long term if LX is still managed as it is.


To be fair, they should use the current times to "nationalize" SWISS in the same way our railways are nationalized. A fully state owned-limited company. So while the government has only limited influence over the company, as the majority share holder it will get any dividends when the company makes money again.

VSMUT wrote:
Amazingly bad idea this.



I said it would be interesting, not that it is a good idea.
 
olle
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 10:12 am

As I understand it Scandinavian countries will give the airlines in their countries credit lines and pay their employees salary while they are grounded.

It means in Norwegian case that scandinavian part is safe, but they still need to pay their employees in for example ireland. The lease of the airplanes registerred outside Scandinavia might be tricky if not for example norwegian government consider them part of the creditline for the mother organisation to pay for the lease.

But except SAS that the governments want to leave I do not see them wanting any more national carriers.
 
MIflyer12
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 10:37 am

mjoelnir wrote:
The USA government has already declared it will safe the USA airlines.

Is that nationalisation? I would make a difference between nationalisation and helping airlines through a crisis not of their making. The difference is, who owns the airline afterwards. The usual USA way is perhaps the most hypocritical. Using the taxpayers money to help a private corporation.
If the taxpayer provides the money, why should the taxpayer not own the result? It can always be sold again.


The U.S. gave grants and loan guarantees to carriers following 9/11. There has been no other government aid (yet). There are plenty of EU instances of restructuring aid, rather than insisting that carriers' restructuring efforts be funded by themselves or by haircuts of shareholders and debtors: AF, Adria, Air Baltic, Cyprus Air, Alitalia, and Olympic to name a few. It is ridiculous to call repeated fundings of Alitalia restructuring aid, as effective restructuring never occurs.
 
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SR380
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 11:57 am

FluidFlow wrote:
SR380 wrote:
The CEO of Swiss International Airlines, which belongs to the Lufthansa group, recently mentioned that he expected the Swiss Government to financially help them out. As a Swiss national, I hope that Federal Council will step in. But only to buy majority shares, which could only be benefit in the long term if LX is still managed as it is.


To be fair, they should use the current times to "nationalize" SWISS in the same way our railways are nationalized. A fully state owned-limited company. So while the government has only limited influence over the company, as the majority share holder it will get any dividends when the company makes money again.

VSMUT wrote:
Amazingly bad idea this.



I said it would be interesting, not that it is a good idea.


But the Swiss Government only hold a 20-something % in LX. I don't how it works in such scenarios. Could they nationalize a "german airline"?
 
Blerg
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 12:09 pm

I doubt Lufthansa will be willing to let go of Swiss since it has been one of the most profitable parts of LH Group. Maybe they will figure out a way with the Swiss government to get some financial aid but for the ownership structure to remain unaffected.
 
FluidFlow
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 12:17 pm

Blerg wrote:
I doubt Lufthansa will be willing to let go of Swiss since it has been one of the most profitable parts of LH Group. Maybe they will figure out a way with the Swiss government to get some financial aid but for the ownership structure to remain unaffected.


Only that right at this moment LX is a liability for LH as long as the Swiss government does not provide money, LH has to bleed cash to keep LX afloat. If the Swiss government does not provide money, than LH has to and most probably the german government. I do not know if germany is willing to pump money into a swiss company.

It will all come down to how the negotiations are going and who is willing to give something. What is LH giving for the state aid of the swiss government for their daughter company.

Switzerland can afford to pay the wages of the staff even and let the airline go bust and then just found a new one if they want to.

We will see what will happen, will the governments support the status quo or will it end in nationalisation and the breaking up of the large companies.
 
oceanvikram
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 12:35 pm

SCFlyer wrote:
ZL and QF in Australia are often mentioned as "contenders" for 'partial' nationalisation (or renationalisation in QF's case) in recent years. The former being one of the larger independent regional carriers with an aging fleet.


Really! That is news to me.

Back to the topic, I doubt there will be many airlines if any get renationalised.

In the case of AZ, it was already losing money for years, but due to EU regulations could not be renationalised. However with the Coronavirus, the Italian government has been given the perfect reason/excuse to buy it out.

I do believe that governments all around the world will assist their respected aviation industry, but definitely not a complete or partial buy out.

I am more interested in what is going to happen to AI’s privatisation. The government said if they don’t find a buyer, they will cease its operations. Now they have a perfect excuse not to privatise.
My comments are based as an aviation enthusiast first, then as a passenger who paid for his own ticket, after that a passenger on a business trip and finally an armchair CEO.
 
Blerg
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 12:44 pm

FluidFlow wrote:
Blerg wrote:
I doubt Lufthansa will be willing to let go of Swiss since it has been one of the most profitable parts of LH Group. Maybe they will figure out a way with the Swiss government to get some financial aid but for the ownership structure to remain unaffected.


Only that right at this moment LX is a liability for LH as long as the Swiss government does not provide money, LH has to bleed cash to keep LX afloat. If the Swiss government does not provide money, than LH has to and most probably the german government. I do not know if germany is willing to pump money into a swiss company.

It will all come down to how the negotiations are going and who is willing to give something. What is LH giving for the state aid of the swiss government for their daughter company.

Switzerland can afford to pay the wages of the staff even and let the airline go bust and then just found a new one if they want to.

We will see what will happen, will the governments support the status quo or will it end in nationalisation and the breaking up of the large companies.


I am not saying they will not try to get the Swiss government to give them money. All I said is that I think LH will try to do that without losing ownership of Swiss. That said, it will be a big blow to LH if they lose control of LX. Though I'm sure Air France and others would be more than happy.
 
delimit
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 12:54 pm

Trend? Other than AZ what airline is being nationalized? Loans, lines of credit, other support are not nationalization unless the government takes majority control.
 
ShinyAndChrome
Posts: 280
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Re: Renationalisation of airlines being a trend.

Wed Mar 18, 2020 3:19 pm

FluidFlow wrote:
VSMUT wrote:
jacobchoi wrote:
I am sorry if this hasn't been covered in the coronavirus related thread. Upon discovering that AZ is about to be renationalised, I am almost certain that another string of airlines, perhaps less so in Europe and definitely not the US3 being renationalised. Those that i could think of as strong contenders include KE, TG, and as a long shot, AF as long as their unions are active.


The circumstances are exceptional in this case. Things are so bad that it is no longer a matter of letting the weak players die. Even the strong players are likely to be killed in a matter of just a few weeks or months. If something isn't done, we will have no airlines at all after this crisis is over.


It would be an interesting scenario, if the whole world decides to let all the airlines fail. The moment the restrictions are liftet, a lot of aircraft and crew are available to hire. It would be a reset of the aviation market and all start from 0. Competition would be huge as most probably a lot of local carriers would emerge and fares would be low. Might be really good for the normal customer.


If this, as you said, utterly implausible scenario were to pass, it would send the signal that no matter what you do, no matter how hard you work, no matter how strong of a business you build, the aviation landscape will soak you in the end thanks to factors well outside anyone's control and that anything anyone does here is ultimately an exercise in heartbreak and futility.

Instead of hoping for a renaissance of startups, why shouldn't we just collectively wise up? In this situation, I would hope every airline worker laid off lands on their feet and does something else with their life. I would hope every kid dreaming of an airline career stays away and finds another passion that can actually deliver stability and opportunity. I would hope every investor considering putting money into a startup spends it on drugs instead, because at least they can be happy while they burn their cash.

If aviation dies in this country, let it rest in peace. And let the Boeings and Disneys and Hiltons and every other business that relies on it burn with us.
 
jfk777
Posts: 7362
Joined: Tue Aug 22, 2006 7:23 am

Re: Renationalisation of airlines being a trend.

Thu Mar 19, 2020 12:14 am

Giving airlines financial assistance and renationalization are two different things. If you want Air India or Aerolinias Argentinas then renationalize.
 
Dominion301
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Re: Renationalisation of airlines being a trend.

Thu Mar 19, 2020 2:06 am

Blerg wrote:
f4f3a wrote:
I find it funny how Norwegian and alitalia were looking at going bust now are most likely to survive as the state steps in


Did anyone really expect AZ to go bust? Norwegian sure but Alitalia?


A cat allegedly has 9 lives. AZ on the other hand has 900.

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