Airlines' Privatisation in Europe: Fully versus Partial Divestiture
AbstractWe study the experience of the three fully privatised European airlines: British Airways, Lufthansa and Iberia. All airlines have undergone a deep restructuring much before (and in view of) the privatisation, with the state bearing most of the related financial cost (especially in the cases of Lufthansa and British Airways), and have taken over (before, after or in the same year of the privatisation) their main domestic competitors. Following full privatisation, labour productivity (particularly for Iberia and Lufthansa) and profitability increase compared to other major European state-controlled airlines; production capacity grows compared to the pre-privatisation period, as well as average salaries (though reflecting the increased labour productivity). Preliminary evidences from stock returns show that investors do not seem require a premium for political risk to invest in shares of fully privatised airlines. In general, these results imply that government ownership in the airline industry can be detrimental, at least to firms’ efficiency, while full privatisation does not seem to expose private shareholders to significant political risk.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by SIPI Spa in its journal Rivista di Politica Economica.
Volume (Year): 97 (2007)
Issue (Month): 1 (January-February)
Contact details of provider:
Find related papers by JEL classification:
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Perotti, Enrico C, 1995. "Credible Privatization," American Economic Review, American Economic Association, vol. 85(4), pages 847-59, September.
- Narjess Boubakri & Jean-Claude Cosset, 1998. "The Financial and Operating Performance of Newly Privatized Firms: Evidence from Developing Countries," Journal of Finance, American Finance Association, vol. 53(3), pages 1081-1110, 06.
- Jean-Jacques Laffont & Jean Tirole, 1991.
"Privatization and Incentives,"
572, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ehrlich, Isaac & Georges Gallais-Hamonno & Zhiqiang Liu & Randall Lutter, 1994. "Productivity Growth and Firm Ownership: An Analytical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1006-38, October.
- Juliet D'souza & William L. Megginson, 1999. "The Financial and Operating Performance of Privatized Firms during the 1990s," Journal of Finance, American Finance Association, vol. 54(4), pages 1397-1438, 08.
- Massimo Florio, 2006. "The Great Divestiture: Evaluating the Welfare Impact of the British Privatizations, 1979-1997," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562227, June.
- Andrei Shleifer, 1998.
"State Versus Private Ownership,"
Harvard Institute of Economic Research Working Papers
1841, Harvard - Institute of Economic Research.
- Eckel, Catherine & Eckel, Doug & Singal, Vijay, 1997. "Privatization and efficiency: Industry effects of the sale of British Airways," Journal of Financial Economics, Elsevier, vol. 43(2), pages 275-298, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabrina Marino).
If references are entirely missing, you can add them using this form.