A flag carrier is a transportation company, such as an airline or shipping company, that, being locally registered in a given state, 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.
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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.
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.
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.
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.
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 | Aerolíneas Argentinas | State-owned (100%) [5] | ||
| Australia | Qantas | None | State-owned until 1992 [6] | |
| Azerbaijan | Azerbaijan Airlines | |||
| 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] | |
| Chile | LAN Airlines | None | ||
| China | Air China | None | State-owned until 2004[10] | |
| Colombia | Avianca | None | ||
| Costa Rica | Lacsa | State-owned | Owned by Taca | |
| Denmark | Scandinavian Airlines | 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%) | ||
| 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] | ||
| Indonesia | Garuda Indonesia | Majority | ||
| Ireland | Aer Lingus | Irish Government 25.4% | ||
| 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 | CAI acquired the name, landing rights, many planes and other assets in the liquidation process of the former Alitalia - Linee Aeree Italiane S.p.A. in Extraordinary Administration |
| Royal Jordanian | ||||
| 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 System | 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 | |
| Samoa | Virgin Samoa[38] | Joint-venture, minority (49%)[39] | ||
| Singapore | Singapore Airlines | 54.5% through Temasek Holdings [40] | ||
| Slovenia | Adria Airways | |||
| South Korea | Korean Air[41] | None[42] | ||
| Spain | Iberia | Minority (5%)[43] | ||
| Sri Lanka | SriLankan Airlines | State-owned[44] | ||
| Sweden | Scandinavian Airlines | Joint-Venture[11] | ||
| Turkey | Turkish Airlines | Majority (51%) | ||
| Taiwan | China Airlines | Sold shares to public in 1993[45] | ||
| Thailand | Thai Airways International | Majority (51%) | Sold shares to public starting in 1991[46] | |
| Trinidad and Tobago | Caribbean Airlines | Majority (84%) | 16 percent owned by the Government of Jamaica[47] | |
| Tunisia | Tunisair | |||
| United Arab Emirates | Etihad Airways | State-owned | ||
| Emirates | State-owned | |||
| Air Arabia | Minority (45%) | |||
| United Kingdom | British Airways | None | Privatised in 1987 [48] | |
| Uruguay | PLUNA[49] | |||
| 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.[50] | ||
| Venezuela | Conviasa | State-owned | ||
| Vietnam | Vietnam Airlines[51] | |||
| Zimbabwe | Air Zimbabwe[52] | Full[53] |
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