Originally Posted by
Callsign Please
Just straight from Wikipedia:
A flag carrier is a transport company, such as an airline or shipping company, that, being locally registered in a given sovereign state, enjoys preferential rights or privileges accorded by the government for international operations.
It doesn’t have preferential rights or privileges per se, but the QF Sale Act places certain conditions upon the company that are not placed on any other airline in order to maintain pseudo status of a national carrier. So it is there in legislation.