France plans billions of euros to rescue aerospace industry

Bloomberg

The French government will present a plan worth billions of euros to rescue its beleaguered aerospace industry, protect key suppliers from Chinese interests and may bring forward some defense orders, the transport minister said.
The aid package to be is aimed at European jet manufacturer Airbus SE, engine maker Safran SA, defense group Thales SA, and hundreds of French suppliers that have seen their businesses dry up during the coronavirus pandemic. The plan will be worth as much as $11.3 billion, Les Echos reported on Monday, although it’s not clear what will be included in the total.
“We will invest several billions over a rather long period,” French Transport Minister Jean-Baptiste Djebbari said. “The state will be here, the European Union will be present.”
The package will aim to kickstart air transport, relaunch manufacturing, and develop less-polluting “hybrid planes” towards 2027 and “carbon neutral” aircraft by 2035, the minister said. In exchange, the industry will have to create or relocate as many jobs as it can in Europe, he said.
However, the minister said the industry will probably have to cut jobs. With airlines grounding their fleets worldwide because of the health crisis, Airbus faces a 40% drop in its activity over at least two years, he said.
Airlines around the world are struggling to survive, with European giants Deutsche Lufthansa AG and Air France-KLM getting state bailouts and carriers desperate to salvage business from what is normally the busy summer. The French government has extended loans and guarantees worth 7 billion euros to Air France-KLM, tying the funds to a reduction in carbon emissions and services on its domestic routes.
The rescue will include the creation of several funds to consolidate the industry and to prevent key suppliers from being acquired by foreign investors, Djebbari said.