European governments have provided the continent’s airlines with nearly €26.6 billion ($31.5 billion) in assistance throughout the coronavirus crisis, underlining the value regulators place on the connectivity carriers provide, according to a report from HSBC.

The figure is equivalent to 46% of the airline’s market capitalisation at December 2019 or 21% of the companies’ pre-Covid-19 full-year revenues for 2019, not including funds carriers accessed through furlough job retention schemes.

State assistance was made available despite airlines often being held in low regard in many countries prior to the crisis, and reflects the value that governments place on carriers’ role in enabling trade and exports, including for healthcare products and PPE, as well as being enablers for tourism and providing employment.

“We think that many governments came to value the connectivity offered by airlines, once their continuing existence was called into question,” writes HSBC.

The bank believes the emphasis among regulators is shifting away from ensuring competitive aviation markets towards stability. For example, while state aid has been made available to many countries’ largest airline groups, it was not forthcoming to Virgin Atlantic Airways or Virgin Australia. France has also refused assistance for secondary airlines.

“We think governments were judging that global connectivity is something that is valued and needs defending but that providing funds to secure a competitive aviation market post pandemic is not a priority for government resources,” HSBC says.

Concerns were raised at the time that state aid being provided to airlines could create “zombie” companies operating under government influence, blocking the market for stronger, more efficient competitors, but HSBC believes there is no evidence of that taking place.

“We expect carriers in receipt of state aid to be motivated to restructure, to moderate their capacity, seeking to generate cashflows and create a platform that will support the necessary raising of fresh private capital, to escape the major burden of state debt. Thus they will not block the market for growing businesses, in our view.”

It notes that looking at where state directors have been put in place on company boards they have generally been sensible choices, and that the competence of corporate governance has largely stayed the same throughout the crisis.