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An El Al's Douglas DC-4 in 1948.

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 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 such as Israel's El Al[11] or Lebanon's Middle East Airlines[12] for nationalist reasons, or to aid the country's economy, particularly in the area of tourism.[13]

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.[14] 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.[15]

In the last two decades,[[14] 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.[15]

In the last two decades,[when?] however, many of these airlines have since been corporatized as a public company or a state-owned enterprise, or completely privatized.[16] The aviation industry has also been gradually deregulated and liberalized,[17] permitting greater freedoms of the air particularly in the United States and in the European Union with the signing of the Open Skies agreement.[18] One of the features of such agreements is the right of a country to designate multiple airlines to serve international routes with the result that there is no single "flag carrier".[19]

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
 Afghanistan Ariana Afghan Airlines[20] Majority[21]
 Albania Air Albania