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Nationalising Losses in Aviation: Interventions in TAP, Alitalia and Sabena Through the Multiple Streams Framework

Comparative Politics
Public Policy
Qualitative
Decision Making
Miguel Madeira
Iscte - University Institute of Lisbon
Miguel Madeira
Iscte - University Institute of Lisbon

Abstract

In the event of the bankruptcy of a major company, national governments have intervened to minimise the social and economic fallout from its potential collapse. In some instances, Governments have taken on the role of creditors and loaners of last resort. This kind of aid has been dubbed as the “Nationalisation of Losses”. In the case of the aviation industry, crises such as the COVID-19 Pandemic and the September 11 Attacks have prompted Goverments to help their struggling airlines surpass these patches of rough air. The degree to which Governments have nationalised the losses of airlines has ranged from loans to restructuring, capital injections, and even buyouts. In some cases, though, the Government has also chosen not to intervene. Despite the considerable body of work which describes Government aid to airlines, the knowledge about the determinants which lead to the nationalisation of losses remains scarce. Using the Multiple Streams Framework (MSF) and elements of the Stakeholder Theory, this paper presents itself as a theoretical framework which aims to give insights into the processes which lead to very different outcomes: the nationalisation of losses (TAP), partial nationalisation of losses (Alitalia) or no nationalisation of losses (Sabena). It intends to enrich the discussion of the role of the policy entrepreneur and members of the policy community when it comes to nationalising losses.