Flag carrier

For a list of airline companies named National Airlines, see National Airlines (disambiguation).

For an aircraft carrier which carries the flag, see flagship.

For a person who carries the flag, see Flag bearer.

A flag carrier is a transportation company, such as an airline or shipping company, that, being locally registered in a given country, 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.

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.

Background

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 is restricted to "US flag air carriers" under the Fly America Act, 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.

List of flag-carrying airlines

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
Argentina	Aerolineas Argentinas	Full
Australia	Qantas	None	State-owned until 1992
Canada	Air Canada	None	State-owned until 1989
Finland	Finnair	Majority (55.8%) Finnair's major shareholder is the Finnish government with a 55.8 per cent holding
New Zealand	Air New Zealand	Majority
Norway	Scandinavian Airlines System	Joint-Venture
Poland	LOT Polish Airlines	Majority (67.97%)
Portugal	TAP Portugal	Full
Spain	Iberia	Minority (5%)
Sweden	Scandinavian Airlines System	Joint-Venture
Republic of China (Taiwan)	China Airlines			Sold shares to public in 1993
United Arab Emirates	Etihad Airways	Yes
	Emirates	Yes
	Air Arabia	Minority (45%)
United Kingdom	British Airways	None	Privatised in 1987
United States	None (formerly Pan American World Airways)	N/A

External links

• International Air Transport Association Organisation formerly responsible for managing air services agreements and international fares.
• US Maritime Administration