Should governments bail out pandemic-hit airlines and hotels?

Should governments come to the aid of major airlines, especially those which have had a good run before the pandemic, what with dropping oil prices and super profits? Photo: AFP

As airlines and hotels with backs to the Covid-19 wall plead with governments for help, it is not unusual for nationalist fervour to override economics in the search for quick fixes with demonstrations of muscular resolve. In many cases, though, this would be folly.

When PanAm’s overreach caused the serial flag-planting airline to collapse under the sheer weight of its network (with slowing passenger demand, rising fuel cost, deregulation, and the haunting tragedy of the 1988 Lockerbie bombing) the American airline was allowed to go under.