France has pledged billions to keep Europe afloat

France has pledged billions to keep Europe afloat

The package will secure 100,000 jobs over the next six months, French Economy Minister Bruno Le Meyer said on Tuesday. It will also help French companies keep up with aircraft manufacturers such as America’s Boeing and China’s COMAC.

“We will not allow the global aviation market to be divided between China and the United States. France and Europe will also be there,” Le Maire said.

The $ 15 billion package ($ 16.9 billion) includes € 7 billion ($ 7.9 billion) in 2006. support for Air France previously announced by the government. Le Maire said airlines would be allowed to delay loan payments for up to a year, helping to save jobs for aircraft manufacturers. Airbus (EADSF) and Dassault (DASTF) as well as suppliers of aerospace components Safran (SAFRF) and Thalès.

About $ 1.5 billion ($ 1.7 billion) will be spent on research and development aimed at producing neutral carbon aircraft in 2035. “France may be the European country where tomorrow’s aircraft will be designed and manufactured,” he added. Le Maire.

The coronavirus crisis has exhausted global airlines and is now spreading to companies that make parts and systems power their aircraft. Consumer demand for flights was lifted during the pandemic due to travel and holiday bans, and is not expected to fully recover for several years after the locks are removed.
Across Europe, governments are intervening to support airlines. Air France (AFLYY) he was rescued in April Lufthansa (DLAKF) finalized the terms of a $ 9 billion bailout package ($ 9.8 billion) by the German government in May. Companies are being pushed to make their activities more environmentally friendly.
US airlines have also benefited from state aid worth about $ 50 billion.

Global competition

Airbus is at the heart of the European aviation industry. It is based in France but with manufacturing facilities in Germany, Spain and the United Kingdom, competing with Boeing to supply aircraft to airlines around the world.

The company secured a credit facility of 15 billion euros ($ 16.9 billion) in March to help boost its position as the pandemic spread across Europe. The French government said on Tuesday it would place outstanding military orders for Airbus’ tankers and refueling helicopters.

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

Boeing (NE), which had already unfolded from the grounding of the 737 MAX before the pandemic arrived, has so far been avoided by a US government rescue by raising $ 25 billion through a bond offering.

China’s COMAC is trying to dismantle the Airbus and Boeing duo, but the single-seater C919 has fallen far behind schedule and could be years before the company produces an aircraft capable of challenging its rivals.

– Hanna Ziady contributed to the report.

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