A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
COVID-19 and bailout policy: The case of Virgin Australia
https://orcid.org/0000-0002-9457-8414
Abstract The impact of COVID-19 on air transport is unprecedented and some well-known airline brands may disappear as a result. Governments around the world have responded swiftly to cushion the financial impact by offering direct wage subsidies, tax relief, loans, etc. This paper explores the government's appropriate responses to failing airlines' bailout request by examining the case of Virgin Australia. Following the bailout policy principles established in the literature, we suggest that bankruptcy protection should be considered as the first solution to a failing carrier. A bailout decision should be guided by a set of principles and procedures, which should not be taken lightly. Our analysis also shows that the government cannot take a hands-off approach in the absence of private lenders and investors, as the costs to consumers and regional residents would be huge if the carrier could not get through the COVID-19 pandemic. A minimum level of assistance with conditions might be needed to maintain market competition.
Highlights This paper explores the government's appropriate responses to failing airlines' bailout request. We study the case of Virgin Australia. The possible solutions to save the failing airline are explored. Bankruptcy protection can be considered as the first solution. A strong analytical framework is needed to inform the government's bailout policy towards the air transport sector.
COVID-19 and bailout policy: The case of Virgin Australia
https://orcid.org/0000-0002-9457-8414
Abstract The impact of COVID-19 on air transport is unprecedented and some well-known airline brands may disappear as a result. Governments around the world have responded swiftly to cushion the financial impact by offering direct wage subsidies, tax relief, loans, etc. This paper explores the government's appropriate responses to failing airlines' bailout request by examining the case of Virgin Australia. Following the bailout policy principles established in the literature, we suggest that bankruptcy protection should be considered as the first solution to a failing carrier. A bailout decision should be guided by a set of principles and procedures, which should not be taken lightly. Our analysis also shows that the government cannot take a hands-off approach in the absence of private lenders and investors, as the costs to consumers and regional residents would be huge if the carrier could not get through the COVID-19 pandemic. A minimum level of assistance with conditions might be needed to maintain market competition.
Highlights This paper explores the government's appropriate responses to failing airlines' bailout request. We study the case of Virgin Australia. The possible solutions to save the failing airline are explored. Bankruptcy protection can be considered as the first solution. A strong analytical framework is needed to inform the government's bailout policy towards the air transport sector.
COVID-19 and bailout policy: The case of Virgin Australia
https://orcid.org/0000-0002-9457-8414
Abstract The impact of COVID-19 on air transport is unprecedented and some well-known airline brands may disappear as a result. Governments around the world have responded swiftly to cushion the financial impact by offering direct wage subsidies, tax relief, loans, etc. This paper explores the government's appropriate responses to failing airlines' bailout request by examining the case of Virgin Australia. Following the bailout policy principles established in the literature, we suggest that bankruptcy protection should be considered as the first solution to a failing carrier. A bailout decision should be guided by a set of principles and procedures, which should not be taken lightly. Our analysis also shows that the government cannot take a hands-off approach in the absence of private lenders and investors, as the costs to consumers and regional residents would be huge if the carrier could not get through the COVID-19 pandemic. A minimum level of assistance with conditions might be needed to maintain market competition.
Highlights This paper explores the government's appropriate responses to failing airlines' bailout request. We study the case of Virgin Australia. The possible solutions to save the failing airline are explored. Bankruptcy protection can be considered as the first solution. A strong analytical framework is needed to inform the government's bailout policy towards the air transport sector.
COVID-19 and bailout policy: The case of Virgin Australia
Zhang, Yahua (author) / Zhang, Anming (author)
Transport Policy ; 114 ; 174-181
2021-09-21
8 pages
Article (Journal)
Electronic Resource
English
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