The future of national flag carriers in developing countries : air Botswana's privatisation struggle

Abstract

The study looked particularly at the operations of national carriers and governments' efforts to sustain the airlines' operations. Evidence has shown that many countries struggle to maintain operations of their flag carriers, but few countries are willing to completely leave the airlines in the hands of the private sector because of national pride. On the other hand, many of those airlines that get into private hands fail and end up being closed down or go back into state hands. These airlines are also perceived to be development tools, in particular for tourism development which is a predominant economic activity in many developing countries. For this reason, many states do not favour privatisation, even though the perception is that the airline industry is better handled by private businesses. The main conclusion of the study for Botswana is therefore that neither full state ownership nor full privatisation is the solution to addressing the problem of ailing flag carriers. There is no single solution, but a combination of several. A broader global view of national airline operations clearly shows that approaches adopted by many successful national airlines, in both developed and developing countries, is some form of partial privatisation.