THE global aviation industry has seen global passenger traffic plunge by an average of 67% in the week of April 27 compared to a year ago due to the Covid-19 pandemic.
In this paper, the Malaysian Aviation Commission reviews the different types of relief instruments, the merits and challenges of each approach, as well as highlighting good governance principles of government assistance. • Equity or equity-related instruments allow for capital raising on commercial terms, though some governments institute conditions. Several airlines have announced rights issues and private placements, drawing new capital from shareholders as well as governments. Apart from this, hybrid instruments, options, or warrants, which would enable the government to recoup its capital in the future, have been used in some packages.
• Route support is vital to ensure the preservation of essential routes to maintain connectivity. In terms of route support, such assistance could be driven primarily by socioeconomic needs rather than profitability, particularly in geographically diverse and remote areas. In Malaysia, the government has continued its support for the rural air services operations in Sabah and Sarawak throughout the movement control order period to provide essential transport for remote communities.