Background Flag carrier

a boeing 747-400 of uk flag carrier british airways departs london heathrow airport (2015)

the second , more broadly used definition of flag carrier legacy of time when countries established state-owned airline companies. governments took lead due high capital costs of establishing , running airlines. however, not such airlines government-owned; pan am, twa, cathay pacific, union de transports aériens, canadian pacific air lines , olympic airlines privately owned. of these considered flag carriers main national airline , sign of country s presence abroad.

the heavily regulated aviation industry meant aviation rights negotiated between governments, denying airlines right open market. these bilateral air transport agreements similar bermuda , bermuda ii agreements specify rights awardable locally registered airlines, forcing governments jump-start airlines avoid being disadvantaged in face of foreign competition. countries establish flag carriers such israel s el al or lebanon s middle east airlines nationalist reasons, or aid country s economy, particularly in area of tourism.

in many cases, governments directly assist in growth of flag carriers typically through subsidies , other fiscal incentives. establishment of competitors in form of other locally registered airlines may prohibited, or heavily regulated avoid direct competition. privately run airlines may allowed established, flag carriers may still accorded priority, in apportionment of aviation rights local or international markets.

in last 2 decades, however, many of these airlines have since been corporatized public company or state-owned enterprise, or privatized. aviation industry has been gradually deregulated , liberalized, permitting greater freedoms of air particularly in united states , in european union signing of open skies agreement. 1 of features of such agreements right of country designate multiple airlines serve international routes result there no single flag carrier .