Top News

France promised billions to keep Europe in the aerospace race

Published

4 years ago

on

The package will secure 100,000 jobs over the next six months, French Economy Minister Bruno Le Maire said Tuesday. It will also help French companies keep up with aircraft manufacturers such as Boeing America and COMAC China.

“We will not allow the global aeronautical market to be shared between China and the United States. France and Europe will also be there,” Le Maire said.

The € 15 billion ($ 16.9 billion) package includes € 7 billion ($ 7.9 billion) in 2007 support for Air France that the government has previously announced. Le Maire said that airlines would be allowed to delay loan payments by one year, helping save jobs at aircraft factories Airbus (EADSF) and Dassault (DASTF) and aerospace component suppliers Safran (SAFRF) and Thalès.

About € 1.5 billion ($ 1.7 billion) will be allocated for research and development with the aim of producing carbon neutral aircraft by 2035. “France can become a European country where future planes will be designed and produced,” Le Maire added.

The coronavirus crisis has wiped out global airlines and is now spreading to companies that make parts and systems power their aircraft. Consumer demand for flights was suppressed during the pandemic by travel bans and closures, and it was expected not to fully recover for several years after the lock was lifted.

The global aviation industry will lose $ 84 billion in 2020 and an additional $ 15 billion in 2021, according to estimates from the International Air Transport Association on Tuesday. Industry groups say that demand for air cargo and travel will increase sharply next year, but passenger travel will still be almost 30% lower than 2019.

Throughout Europe, governments are stepping in to support airlines. Air France (EVERY) given a bailout in April, meanwhile Lufthansa (DLAKF) completed the € 9 billion ($ 9.8 billion) bailout rescue package from the German government in May. Companies are encouraged to make their operations more environmentally friendly.
US airlines also benefit from government bailouts worth about $ 50 billion.

Global competition

Airbus is in the heart of the European aviation industry. Based in France but with Production facilities in Germany, Spain and the United Kingdom, compete with Boeing to supply aircraft to airlines throughout the world.

See also  Portuguese newspaper: Gabriel Pires is close to a deal with Botafogo for about 26 million reais

The company obtained a credit facility of € 15 billion ($ 16.9 billion) in March to help strengthen its position when the pandemic swept across Europe. The French government said on Tuesday that it would submit pending military orders for refueling tankers and helicopters.

Airbus also benefits from assistance provided to Air France, one of its biggest customers.

“The plan announced by France is solid and the right response to the challenge,” CEO Guillaume Faury said on Twitter. “This will help us soften the blow in the short term, while maintaining our ability to recover when the time comes. At Airbus, in the face of this crisis, we do everything we can to protect our business & industry.”

Boeing (BA), which had staggered off the MAX 737 runway before the pandemic arrived, so far it has avoided the US government bailout by raising $ 25 billion through bond deals.

COMAC China is trying to break the duopoly enjoyed by Airbus and Boeing, but its C919 single aisle plane has fallen far behind schedule and may be years before the company manufactures aircraft capable of challenging rivals.

– Hanna Ziady and Eoin McSweeney contributed reporting.

Related Topics:
Click to comment

Trending

Exit mobile version