Covid thrusts governments into cockpit with flag carrier aid

Decades after being unshackled from government control, many of Europe’s largest airlines are being forced back into the arms of states by the pandemic. With air travel still showing no signs of recovery in the region, the carriers may have to contend with their saviors as powerful shareholders for some time to come. Air France-KLM on Tuesday became the latest to get a E4b bailout that will see the French government reemerge as its biggest shareholder with a stake of up to 30%. The flag bearer joins Lufthansa, Alitalia, Sweden’s SAS and TAP Air Portugal to see a bigger state presence following aid sought to cope with one of the industry’s worst crises. Airlines have been among the hardest hit by Covid-19, which decimated air travel. Even before the latest setbacks, the IATA said carriers would need as much as $80b more in government money this year. The concern in Europe now is that demands from the shareholding states may skew the industry in ways that would have an impact on everything from cost cuts to route decisions and ticket prices. “While bailing out airlines in the context of the Covid-19 crisis is certainly a legitimate emergency measure, the suspicion is that this might serve as an excuse to return to state-owned carriers serving political agendas, at least for some governments,” said Sascha Albers, a professor of international management at the University of Antwerp.<br/>