The Chicago Convention of 1944 is regarded as the foundation of the International Civil Aviation organisation. It is following this convention that countries started having their flags carried on aircraft liveries, giving rise to the phrase "flag carrier."
The Cambridge dictionary defines a flag carrier as, "an airline that is or was owned by a government, often with the name of the country in its name." Such an airline may be supported by the State through incentives, protected markets and other preferential treatment.