France an­nounces US$17b in aid for avi­a­tion in­dus­try

Jamaica Gleaner - - FINANCE -

FRANCE’S GOV­ERN­MENT is pump­ing €15 bil­lion (US$16.9 bil­lion) in res­cue money into the pan­demic-bat­tered aero­space in­dus­try, in hopes of sav­ing its hun­dreds of thou­sands of jobs and keep­ing plane maker Air­bus and na­tional air­line Air France glob­ally com­pet­i­tive.

In ex­change for aid, com­pa­nies will be re­quired to in­vest more and faster in elec­tric, hy­dro­gen or other lower-emis­sion air­craft, as France aims to make its avi­a­tion in­dus­try the “clean­est in the world”.

The deal was ne­go­ti­ated with unions, who said they would stay vig­i­lant about job guar­an­tees. Some en­vi­ron­men­tal ac­tivists ex­pressed scep­ti­cism about green am­bi­tions for such a high-emis­sion in­dus­try.

“We will do ev­ery­thing to sup­port this French in­dus­try that is so crit­i­cal for our sovereignt­y, our jobs and our econ­omy,” Fi­nance Min­is­ter Bruno Le Maire said, un­veil­ing the plan along­side the min­is­ters of trans­port, de­fence and en­vi­ron­ment – a sign of how im­por­tant the aero­nau­tic sec­tor is in France.

The French aid money in­cludes di­rect gov­ern­ment in­vest­ment, sub­si­dies, loans and loan guar­an­tees. It also in­cludes a spe­cial fund jointly fi­nanced by the gov­ern­ment, Air­bus and other big man­u­fac­tur­ers to sup­port small sup­pli­ers.

It in­cludes €7 bil­lion in loans and loan guar­an­tees that the gov­ern­ment had al­ready promised to Air France, whose planes were al­most en­tirely grounded by the virus.

And like a sim­i­lar multi­bil­lion-euro plan to save the French car in­dus­try an­nounced last month, the avi­a­tion bailout re­quires more in­vest­ment in clean en­ergy – and puts pres­sure on man­u­fac­tur­ers to avoid lay-offs.

It will aim at mod­ernising the pro­duc­tion chain and pre­serv­ing Euro­pean avi­a­tion know-how, Le Maire said.

“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,” he said. “We won’t let the world aero­nau­ti­cal mar­ket be shared be­tween China and the United States. France and Europe will re­tain their po­si­tion.”

RES­CUE PLAN

The gov­ern­ment will help Air France buy Air­bus planes, and pledged to or­der €600 mil­lion worth of re­fu­elling tankers, drones and he­li­copters from Air­bus’de­fence arm. In ad­di­tion to dom­i­nat­ing the global pas­sen­ger air­craft mar­ket along­side Boe­ing, Air­bus is also a ma­jor sup­plier of mil­i­tary air­craft to Euro­pean gov­ern­ments.

The res­cue plan in­cludes in­vest­ment in de­vel­op­ing the suc­ces­sor to Air­bus’ widely used mid-range A320, a new hy­brid or hy­dro­gen re­gional plane, and a new light he­li­copter.

The gov­ern­ment is also work­ing with unions on a long-term, short­work scheme that would al­low the in­dus­try to pre­serve jobs as it slowly ramps pro­duc­tion back up.

As a re­sult of the virus lock­down, Air­bus said it is cut­ting pro­duc­tion by 35 per cent to 40 per cent, and Boe­ing an­nounced that it would cut 10 per cent of its 161,000-per­son work­force through at­tri­tion, ear­ly­out of­fers and lay-offs.

“The re­cov­ery will be long,” Le Maire warned. The gov­ern­ment pre­dicted it will be 2023 be­fore the in­dus­try reaches pre-cri­sis lev­els.

AP

In this May 14, 2020 file photo, French po­lice stand guard in Ter­mi­nal 2 of Charles de Gaulle in­ter­na­tional air­port in Roissy, north of Paris.

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