France unveils a 15 billion euro rescue package for its stricken aerospace industry

  • France revealed an aerospace support plan worth 15 billion euros on Tuesday in a move to protect one of the most hard-hit sectors during the COVID-19 pandemic, which caused an abrupt halt to global air transport.
  • The economy’s flag carrier Air France is expected to receive 7 billion euros in aid to support the airline’s recovery and help it become environment-friendly.
  • Airbus, one of the world’s two largest aircraft makers along with Boeing, has its operational headquarters in Toulouse, France.
  • France’s minister for economy Bruno Le Maire said the relief plan includes investment that will equip the airline industry to create carbon-neutral aircrafts by 2035, and conduct research for new technologies.
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France on Tuesdayannounced an emergency bailout package of about 15 billion euros ($US17 billion) to support its ailing aerospace industry.

France’s economic minister Bruno Le Maire said the aerospace support plan would be in the form of aid, investment, loans, and guarantees to protect the industry from the consequences of the COVID-19 pandemic.

The French aeronautics sector, which represents 300,000 jobs and 58 billion euros ($US65 billion) in turnover, is not expected to return to pre-crisis levels before 2023, with demand for flights, and therefore new planes, taking a beating during the pandemic.

Airbus, one of the world’s two largest aircraft makers along with Boeing, has its operational headquarters in Toulouse, France.

France said on the announcement of the bailout that it wants to be at the forefront of the decarbonization of world air traffic, with Le Maire saying that the country plans to produce “clean planes and helicopters of tomorrow.”

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Le Maire also announced that the country’s flag carrier Air France would receive 7 billion euros (about $US8 billion) in loans to save the company from a potential downfall and enable the economy’s environmentally-friendly goal.

Some 1.5 billion euros ($US1.7 billion) have been set aside for the Council of Civil Aeronautical Research to facilitate development of “clean aircraft” technologies. One of the economy’s long-term plans is to ensure the production of carbon-neutral aircrafts by 2035.

The aid package also includes 500 million euros ($US564 million) for small-and-medium suppliers frum July 2020, and 300 million euros ($US338 million) to sub-contractors for streamlining and upgrading their businesses to cope with the pandemic’s hit to demand.

On Tuesday, Hong Kong announced a $US5.2 billion bailout package for its flag carrier Cathay Pacific. Late in May, the German government approved a $US9.8 billion relief package for its state carrier Lufthansa, leaving it with a 20% stake in the stricken airline.

Earlier this year, President Donald Trump signed into law a grant worth $US25 billion in loans and loan guarantees for major US passenger airlines, and an additional $US4 billion for cargo air carriers.

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