Anthony Albanese wrong on government ownership of world's top airlines

Updated

Those in favour of government support for Qantas talk of an uneven playing field, pointing to airlines based in the Middle East and Asia where governments have a significant ownership stake. But is the playing field really that uneven?

In a recent interview on the ABC's 7.30, Opposition transport spokesman Anthony Albanese said: "There's a reason why around the world national governments have carriers that they support, either directly through government ownership - and eight out of 10 are majority government-owned of the world's top 10 airlines."

ABC Fact Check takes a look at Mr Albanese's claim that eight out of the world's top 10 airlines are "majority government-owned".

The claim: Anthony Albanese says eight out of the world's top 10 airlines are majority government-owned.

Anthony Albanese says eight out of the world's top 10 airlines are majority government-owned. The verdict: None of the top 10 rankings of airlines based on passenger traffic, capacity, financial results, fleet size, employee numbers and customer feedback consistently include a majority of government-owned airlines. Mr Albanese is wrong.

What makes a "top 10" airline

There are a variety of ways of measuring a "top 10" airline, ranging from the number of passengers to the best airline meals.

The International Air Transport Association (IATA), the trade association for world airlines, publishes world air transport statistics on an annual basis that include rankings of airlines based on a number of criteria. The most recent statistics are from 2012. Other objective numerical information is compiled by aviation data provider Innovata. Various organisations also prepare rankings of airline quality, with one of the better known being Skytrax World Airline Awards, compiled from an online survey of passengers.

Associate Professor Tony Webber of the University of Sydney Business School and former chief economist of Qantas says, in his view, "passenger kilometres is the best measure of the size of an airline's operations". A passenger kilometre represents "the transport of one passenger by a defined mode of transport (road, rail, air, sea, inland waterways etc.) over one kilometre".

Fact Check asked Mr Albanese for details of the statistics that back up his claim. His spokesman provided a list matching the Skytrax 2013 list, telling Fact Check that "eight of the top ten are government backed". But saying "government backed" is not the same as saying "majority government owned", as Mr Albanese did in his 7.30 interview.

To provide proper scrutiny on Mr Albanese's claim, Fact Check considered the following IATA statistics:

Number of scheduled passengers carried

Number of kilometres travelled

Operating revenue

Operating profit

Number of employees

Size of fleet

Fact Check has also looked at:

Capacity levels (available seats regardless of whether the seats are occupied)

Skytrax 2013 customer satisfaction survey results

The world's top 10 airlines by traffic

IATA publishes traffic statistics based on two measures - one is the number of passengers transported, the other is the "passenger kilometres flown". The latter figure takes into account that some long-haul airlines, such as Qantas, may have less individual passengers but that the passengers they do have travel for longer distances.

Scheduled passengers carried:

Rank Airline Level of government ownership Passengers (thousands) 1 Delta Air Lines Privately owned 116,726 2 Southwest Airlines Privately owned 112,234 3 United Airlines Privately owned 92,619 4 American Airlines Privately owned 86,335 5 China Southern Airlines Majority government owned 86,277 6 Ryanair Privately owned 79,649 7 China Eastern Airlines Majority government owned 79,611 8 Lufthansa Privately owned 64,393 9 US Airways Privately owned 54,238 10 Air France Some government ownership 50,636

Scheduled passenger-kilometres flown:

Rank Airline Level of government ownership Kilometres flown (millions) 1 United Airlines Privately owned 288,282 2 Delta Air Lines Privately owned 271,567 3 American Airlines Privately owned 203,336 4 Emirates Majority government owned 180,880 5 Lufthansa Privately owned 142,512 6 Southwest Airlines Privately owned 137,708 7 Air France Some government ownership 135,821 8 China Southern Airlines Majority government owned 135,021 9 British Airways Privately owned 124,318 10 Qantas Airways Privately owned 108,051

These statistics show that based on traffic, the majority of the top-10 are not government owned. Only two of the top 10 airlines by passenger numbers or passenger kilometres flown are majority government owned.

The world's top 10 airlines by capacity

The measure of "available seat kilometres" shows how much capacity airlines put into the market, irrespective of whether they can fill that capacity with paying customers. Data provider Innovata could not provide this information to Fact Check by time of publication, however weekly figures for March 2013 were published on industry blog The Aviation Writer.

Rank Airline Level of government ownership Available seat kilometres 1 United Airlines Privately owned 7,593,105,385 2 Delta Air Lines Privately owned 7,097,533,389 3 American Airlines Privately owned 5,253,314,537 4 Emirates Majority government owned 5,250,226,571 5 Southwest Airlines Privately owned 3,662,356,392 6 Lufthansa Privately owned 3,393,925,160 7 British Airways Privately owned 3,205,062,172 8 Air France Some government ownership 2,933,176,964 9 US Airways Privately owned 2,870,22,1036 10 China Southern Airlines Majority government owned 2,633,933,480

On this measure there are only two majority state owned airlines - Emirates and China Southern - in the top 10.

The world's top 10 airlines by operating revenue and profit

IATA also provided Fact Check with data on airline operating revenue and profit. Again, Mr Albanese's claim does not stack up.

Operating revenue:

Rank Airline Level of government ownership US$ thousands 1 Lufthansa Privately owned 42,569,000 2 United Airlines Privately owned 37,151,768 3 Delta Air Lines Privately owned 36,944,365 4 Air France Some government ownership 32,936,718 5 American Airlines Privately owned 24,825,070 6 Emirates Majority government owned 16,759,673 7 US Airlines Privately owned 13,991,992 8 Cathay Pacific Airways Some government ownership 12,740,513 9 Singapore Airlines Majority government ownership 10,927,843 10 Korean Airlines Privately owned 10,886,119

Out of the top 10 by operating revenue, four airlines have a degree of government ownership. Only Emirates and Singapore Airlines have majority government ownership.

Operating profit:

Rank Airline Level of government ownership US$ thousands 1 Delta Air Lines Privately owned 2,563,721 2 Lufthansa Privately owned 1,690,000 3 Hainan Airlines Majority government owned 1,175,625 4 US Airways Privately owned 821,977 5 Turkish Airlines Some government ownership 545,918 6 COPA Privately owned 402,536 7 Lan Airlines SA Privately owned 331,208 8 Xiamen Airlines Majority government owned 299,001 9 Shenzhen Airlines Majority government owned 283,055 10 Mahan Airlines Status unclear 253,203

On the profit measure, at least three -and potentially four - airlines are majority government owned. Hainan, Xiamen and Shenzhen all have majority government ownership. Iranian based Mahan Airlines is reportedly a private airline, however Fact Check is unable to independently confirm this. In any event, the total falls well short of Mr Albanese's claim.

The world's top 10 airlines by number of employees

A look at the total employees, show that only three of the top 10 airlines (Emirates, China Southern and Egyptair) are majority government owned.

Rank Airline Level of government ownership Total employees 1 Lufthansa Privately owned 116,957 2 United Airlines Privately owned 88,185 3 Delta Air Lines Privately owned 78,176 4 American Airlines Privately owned 64,557 5 Air France Some government ownership 54,261 6 British Airways Privately owned 41,313 7 Emirates Majority government owned 39,069 8 China Southern Airlines Majority government owned 34,235 9 Qantas Airways Privately owned 33,608 10 Egyptair Majority government owned 32,805

The world's top 10 airlines by total fleet size



Looking at fleet size, there are only two majority government-owned airlines in the top 10 - China Southern and Air China.

Rank Airline Level of government ownership Number of planes 1 Delta Air Lines Privately owned 717 2 United Airlines Privately owned 702 3 American Airlines Privately owned 614 4 China Southern Airlines Majority government owned 491 5 Lufthansa Privately owned 407 6 Air France Some government ownership 380 7 US Airways Privately owned 380 8 Air China Majority government owned 316 9 Qantas Airways Privately owned 313 10 British Airways Privately owned 274

The world's top 10 airlines by customer feedback

The Skytrax survey relies on online customer responses in ranking "quality standards across more than 40 areas of airline front-line product and service". It does not involve any objective measure such as airline size, where the airline operates or its profitability.

This is the survey apparently relied upon by Mr Albanese when he made his claim. However, even on this survey, only five of the airlines are majority government owned. Mr Albanese's spokesman has subsequently referred to government backing, suggesting that ANA All Nippon Airlines and Qantas were the only airlines that were not "government backed". Given government "backing" is an ill-defined concept and not mentioned in the 7.30 interview, Fact Check has not formed a view on whether particular airlines fall into that category.

Rank Airline Level of government ownership 1 Emirates Majority government owned 2 Qatar Airways Majority government owned 3 Singapore Airlines Majority government owned 4 ANA All Nippon Airlines Privately owned 5 Asiana Airways Some government ownership 6 Cathay Pacific Airways Some government ownership 7 Etihad Airways Majority government owned 8 Garuda Indonesia Majority government owned 9 Turkish Airlines Some government ownership 10 Qantas Airways Privately owned

The level of government ownership

To determine the level of government ownership of airlines, Fact Check relied upon financial reports available on airline websites, and a list of government-owned and privatised airlines published by the United Nations.

Government ownership can take several forms. Fact Check includes as government ownership any direct equity interest by a government, an entity controlled by a government (such as another airline) or a government-controlled investment company. For example, Emirates is wholly-owned by the government of Dubai, through the Investment Corporation of Dubai. The major shareholder of Singapore Airlines is Temasek Holdings (Pte) Ltd with 55.8 per cent. Temasek is an investment company owned by the government of Singapore.

Some of the Chinese carriers are majority owned by other Chinese airlines. If the parent Chinese airline is majority government owned, Fact Check considers both airlines to be government owned. For example, Xiamen Airlines is 51 per cent owned by China Southern Airlines, which in turn is 51.13 per cent owned by the Chinese government's China Southern Air Holding Company.

Other airlines have partial government ownership. One example is Air France-KLM, which is 15.9 per cent owned by the French state. Turkish Airlines has a large government minority ownership of 49.12 per cent. Another example is Hong Kong-based Cathay Pacific, which is 29.99 per cent owned by the Mainland's Air China.



Fact Check has classed Asiana Airways as having some government ownership, although its status is unclear. The government owned Korean Development Bank owns 6.25 per cent of the airline, however the bank is an independent financial institution with its own management rather than simply a government investment fund.

The verdict

Top 10 rankings of airlines based on objective measures such as passenger traffic, capacity, financial results, fleet size or employee numbers consistently include a majority of privately owned airlines.

On the more subjective measure of "quality" as determined by an online survey and cited by Mr Albanese's office, only half of the airlines have majority government ownership.

Mr Albanese is wrong when he says that eight out of 10 of the world's top 10 airlines are majority government owned.

Sources

Topics: air-transport, alp, federal-government, anthony-albanese, australia

First posted