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Managing Fiscal Risks from National Airlines in Pacific Island Countries
Author:
Vybhavi Balasundharam null

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Ms. Leni Hunter
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Iulai Lavea
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Mr. Paul G Seeds
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 183
Language:
English
Publication Date:
09 Jul 2021
DOI:
https://doi.org/10.5089/9781513588865.001
ISBN:
9781513588865
ISSN:
1018-5941
Pages:
27
Keywords:
B. airline planning process; airline Support; national Airlines; PFM perspective; D. budget execution consideration; financial support; Fiscal risks; Budget planning and preparation; Financial statements; Public enterprises; COVID-19; Pacific Islands
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Pacific island countries (PICs) rely on national airlines for connectivity, trade, and tourism. These airlines are being struck hard by COVID-19. Losses will weigh on public sector balance sheets and pose risks to economic recovery. With a backdrop of tight fiscal space and increasing government debt, losses in airlines are adding to fiscal risks in some PICs. This paper discusses tools to evaluate and manage the fiscal risks from national airlines in the Pacific. We present a snapshot of the current state of Public Financial Management (PFM) practices in PICs and detail the best practices. This exercise would illustrate the areas in which PICs have scope to improve their risk management with regard to national airlines. We then discuss the use of diagnostic tools and capacity development to enhance monitoring and risk management. Greater transparency and accountability in the airlines, combined with rigorous oversight, would be the first step towards improved financial management of national airlines.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund