France promises billions to keep Europe in the air race

The package will provide 100,000 jobs over the next six months, French Economy Minister Bruno Le Maire said on Tuesday. French companies will keep up with aircraft manufacturers such as American Boeing and Chinese COMAC.

The 15 billion euro ($ 16.9 billion) package includes 7 billion euros ($ 7.9 billion) support for Air France that the government had announced earlier. Le Maire said airlines would be allowed to defer loan payments for up to a year, helping to save jobs for aircraft manufacturers Airbus (EADSF) and Dassault (DASTF) as well as aircraft component suppliers Saffron (SAFRF) and Thales.

The global aviation industry will lose $ 84 billion in 2020 and an additional $ 15 billion in 2021, according to the International Air Transport Association’s forecast on Tuesday. The industry group said demand for air cargo and travel will increase sharply next year, but passenger travel will still be nearly 30% less than in 2019.

Global competition

Airbus is at the heart of the European aviation industry. Headquartered in France, but s manufacturing facilities in Germany, Spain and the UK, competes with Boeing to deliver aircraft to airlines around the world.

The company secured a 15 billion-euro ($ 16.9 billion) credit instrument in March to bolster its position after the pandemic spread across Europe. The French government announced on Tuesday that it would bring waiting for military orders to pay for tanks and helicopters by Airbus.

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

“The plan announced by France is a solid and real response to the challenges,” CEO Guillaume Faury said on Twitter. “It will help us mitigate the blows in the short term, preserving our ability to recover when the time comes. At Airbus, despite this crisis, we are doing everything possible to protect our business and industry.”

China’s COMAC is trying to break the duopoly enjoyed by Airbus and Boeing, but its single-pass C919 plane has lagged behind the plan, and it could be many years before the company produces an aircraft that can challenge rivals.

– Hanna Ziady and Eoin McSweeney contributed to the reporting.