Airline ownership and control: A corporate governance perspective

Most countries require substantial domestic equity ownership of designated national airlines, yet changes in international capital markets have significantly altered the way control rights associated with equity are exercised. We argue that in a context of aviation deregulation and liberalization, a new generation of aviation financiers has appeared whose incentives and competence for control diminishes the relevance of the nationality provisions contained in most bilateral agreements. The paper describes recent developments in ownership and control and its impact on airline management.