From Rescue to Rebirth: Portugal and Italy’s Government Strategies for National Airlines Amidst COVID-19

The COVID-19 pandemic had an unprecedented impact in the aviation industry: several Governments in Europe were called to action in order to help their struggling airlines surpass this patch of rough air. In particular, two cases stand out in the European context, Portugal (TAP Air Portugal) and Italy (Alitalia). Both were renowned Southern European state-owned flag carriers with a long history of financial difficulties, restructurings, privatisation attempts and political meddling. However, the government intervention in these two similar cases unfolded in distinct and opposite fashions. In the Portuguese case, the Government performed a 3.2 billion Euro injection and increased its stake in the company from 51 to 100%, thus preventing its collapse. In the Italian case, however, the Government decided that Alitalia was beyond salvation and created a new airline - ITA Airways - by buying part of the assets of Alitalia and drawing to a close the operations of the latter. Using the Multiple Streams Framework (MSF) and comparative politics, this paper presents itself as a "work in progress" written in the midst of my PhD Thesis. In this regard, it tries to shed some light on the processes by which these two similar cases ended up with the aforementioned outcomes as a result of their respective government interventions during the same policy window – the COVID-19 pandemic. By doing so, it hopes to contribute to the discussion of the processes behind Government interventions in ailing state-owned airlines during a sudden crisis. On the other hand, it will bear in mind the influence of interest groups and think tanks in policy, and the external pressures posed by the global aviation market and the European Union.