There were no commercial airlines before WW1, and most airlines set up between the 2 world wars (1918-1939) are privately owned without government investment.

WW2 makes many airlines ceased their commercial service and hence near-bankruptcy situation, so most airlines are purchsed by the government of their nations. This also caused forced merger of some privately owned airlines into fully state-owned airlines, like the merging of 8 Indian airlines into long haul carrier Air India and short haul carrier Indian Airways in 1947. Even Air Canada was fully state-owned until 1988, though USA, the neighbouring state of USA, is the only state in the world having no government involvement in airlines (even Cathay Pacific has some shares hold by government since Asian Economic Crisis in 1997.)

There are many Asian countries setting up their state owned flag carriers after WW2, like Malaysia, Singapore, Thailand, Philippines, Indonesia, Taiwan, etc. Because of large capital involvement, almost all flag carriers in Asia, except Cathay Pacific, Philippine Airlines, the airlines in Korea and Japan, are fully state-owned before 1980's. Even Japan Airlines had 50% of its share held by the government between 1953 and mid-1980's. This makes Cathay Pacific being the only flag carrier in Asia not under government control between 1950's and 1980's.

The government involvement caused very different results. Most fully state-owned airlines, especially that of African Airlines have very poor finance and very low quality of service, especially that of Europe like Air France, Iberia, TAP Portugal, Olympic Airways of Greece, Africa and Communist countries. The airlines in Middle East and Aer Lingus, which is a fully state-owned airline since 1950's, are few exceptions. In fact Aer Lingus has service even better than Lufthansa, KLM, SAS, etc, nearly as good as Swissair (now Swiss Air Lines), British Airways, and is long a symbol of pride among the Irish.

The airlines with both state and private ownership have better results than the fully state-owned ones, because these airlines get good financial support from the government while they have to be profitable so to provide rewards for the private sector. Singapore Airlines, which has about 55% of its share owned by the state, has excellent record of profits since 1980's, and is the most profitable airline in the world in many years.

Because of drop in international air travel and hence serious loss for fully state-owned airlines, many countries decided to privatize their state-owned airlines. British Airways, which was fully state-owned before 1987, was very heavily losing, with losses up to GBP 800 million per year. Its service was very poor and its routes were very outdated. But things go much better since its privatization in 1987, with 14 consecutive years of profit from 1987 to 2000. It even had profits of US$800 million in a year.

Most other European airlines, however, refused to privatize like that of British Airways to make them competitive and profitable. Air France, which is fully state-owned airline since WW2, loses money every year since 1980's, and is the most heavily losing airlines in the world in many years. Olympic Airways, also a fully state-owned airline, has extremely poor service, even worse than most South East Asian carriers. This also makes almost all people, including the Greeks, hate the airline very much and wanted it to go bankrupt!!