France moves to save aerospace sector via ECA spending

(Reuters, Paris, 9 June 2020) France launched what it billed a 15-billion-euro ($17 billion) support plan for its aerospace industry on Tuesday, accelerating research on a green jetliner and warning 100,000 French jobs could be lost due to the coronavirus crisis. The plans - which include 7 billion euros of aid already awarded to Air France and bring forward some defence spending - involve a joint effort by government and industry to keep French jobs and prepare the next generation of civil jets. “We must save our aerospace industry,” Finance Minister Bruno Le Maire said, adding Europe - championed by Airbus - would not sacrifice its place on the world market to U.S giant Boeing or China’s upcoming planemaking competitor COMAC. The move comes after Boeing called for tens of billions in loan guarantees to help U.S. suppliers. Both Airbus and Boeing buy parts in each other’s home markets and fragile suppliers are seen as an Achilles heel as manufacturers weather the crisis. France said it had agreed with Britain, Germany and Italy a one-year moratorium on repayment by airlines of aircraft delivery loans backed by export credit agencies - a move worth 1.5 billion euros. The system of export credits allows airlines with weak balance sheets to raise bank funds as though they had the same creditworthiness as governments of aircraft-producing nations. It was heavily used on both sides of the Atlantic to smooth exports during the 2008-9 financial crisis but has had a limited role in tackling the coronavirus crisis so far because the problem is mainly one of collapsing worldwide demand.