Following today’s (Tuesday 9 June) news that the French Government promised a €15bn rescue package to the aerospace industry;
Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the decision:
“By European standards, France is hyperactive in its aid policy to sustain the aerospace industry. Aerospace represents billions of euros in revenues, hundreds of thousands of jobs and is one of the most successful export sectors for the country. It is therefore understandable that authorities would want to see companies such as Airbus, Dassault or Safran emerging from the COVID-19 crisis without too much damage.
“The promised €15bn aid going to aerospace, including €7bn for Air France-KLM, has no rival yet in Europe. For comparison, Germany’s generous €9bn bailout for Lufthansa and the United Kingdom’s £330bn loan guarantees package have either ignored or not particularly targeted aerospace and defense manufacturers.
“Among the beneficiaries of France’s aid will figure smaller enterprises down the supply chain with a €1bn investment fund, part of the larger package. Preserving small and medium-sized enterprises (SMEs), more prone to fail when confronting economic disruptions, is a regular concern for aerospace and defense producers. SMEs don’t have the financial resources to face months of disruptions and erratic demands, but their niche expertise is essential for final integrators like Dassault or Airbus. 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.”