France’s government has turned on the taps for the domestic aviation industry by stumping up another €8 billion for the broader domestic industry on top of the €7 billion already pledged to Air France, bringing the state’s total COVID 19 bill up to €15 billion ($16.9 billion).
With Air France already securing state support the French government has turned its attention to the domestic aviation sector itself with Airbus set to be a major beneficiary of the additional funding.
In a sign of the extent of government support the deal was unveiled by the Finance Minister Bruno Le Maire, flanked by the ministers of transport, defence and environment. “We will do everything to support this French industry that is so critical for our sovereignty, our jobs and our economy,” said Le Maire.
Of the extra €8 billion, €1 billion is the previously announced Aerospace 4 plan, the government is investing €1.5bn on the over three years for research into greener aircraft, while strengthening existing schemes for the sector such as unemployment support and export credit guarantees.
Aviation is a strategically important industry for France, employing 300,00 people with annual revenues of €58 billion and Le Maire explicitly referenced the need to protect the domestic industry from Chinese and US competition when announcing the plan.
“We must save our aeronautical industry. We must avoid any decline in the coming months with regard to the American giant Boeing and the Chinese giant Comac. We won’t let the world aeronautical market be shared between China and the United States. France and Europe will retain their position,” he said.
Airbus will be helped by the government speeding up defence orders to the value of €600 million and investment in developing the successor to Airbus' widely used mid-range A320, a new hybrid or hydrogen regional plane, and a new light helicopter.
As a result of the virus lockdown, Airbus announced it was cutting production by up to 40%. While the aid is targeted at supporting French companies Nicolas Jouan, aerospace and defense analyst at GlobalData, said the broader European aviation supply chain would benefit. “By helping its aerospace industry, France is actually boosting a European-wide network since Airbus or Safran have extensive operations in the UK, Germany, Netherlands or Spain,” he said in a note.