Following the recent news that the French Government is preparing a €1bn crisis fund for aerospace suppliers;
Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the situation: “Among all European countries, it is no surprise to find France as one of the most active in providing financial help to the aerospace industry to face COVID-19 disruptions. The country regularly tops European rankings in arms export every year and intends to keep things this way. A recent ministerial report to the French Parliament documented €8.3bn in sales for the year 2019, with an increase of intra-European sales, and reasserted the importance of aerospace for the national economy. Companies such as Dassault, Airbus or Safran are heavyweights in the fighter jet, commercial aircrafts and engine markets. These players rely on a large supplier base of small and medium-sized enterprises (SMEs) that the government would like to see emerge stronger from the crisis.
“More than €1bn could be made available to players down the supply chain in order to confront the COVID-19 pandemic without too many losses. French aerospace SMEs are indeed confronted to a slowdown of activity: Airbus has cut the production rates of its main jetliners and Dassault’s first batch of Rafale delivery to the Indian Air Force is reportedly at risk of delays. These difficulties are reflected in many other countries such as the US, where the Department of Defense already accelerated billions of dollars of payment to SMEs and individual players such as Lockheed Martin or General Dynamics granted millions in advanced payments to their suppliers.
“Instead of advanced payment, the French initiative will provide funding opportunity to SMEs by joining private resources from top French aerospace companies and investment funds with tax-payer money. This will hopefully soften the bill for small businesses disrupted by the pandemic.”