France announces €15 billion euro financial support programme for airlines

France has pledged to make a significant financial package available for struggling airlines and the wider aerospace industry. Announced by French Finance Minister Bruno Le Maire, the new package of measures will prevent many businesses in aeronautics from collapsing. This comes following a lockdown that has hammered every sector of the French economy including aviation, with passenger traffic dropping to the lowest level since the 1950s. While the new measures of incentives are welcome, there is a long way to go before the economy and the sector can rebound.

As the lockdown hit economies around the world, orders for Airbus planes dried up forcing the manufacturer to halt production, and send workers home. The problem was then exacerbated by the knock-on effect of lockdowns in different countries leading to a slump in passenger demand while airlines searched to consolidate or even scrap parts of their fleets that no longer in use.

Following the lifting of the lockdown, Air France-KLM is one of the key beneficiaries of the new funding, and will receive €7 billion in loans, allowing it to make additional orders of Airbus planes it had planned earlier this year.

France’s Defence Minister also pledged the acceleration of military orders for manufacturers including the purchase of several Airbus A330 planes that would then be converted as refuelling tankers for missions at home and abroad.

The new measures of incentives has been welcomed by the aviation industry, and other countries are calling for bailouts as well, including British airlines and manufacturers, who said this week that they may need immediate state support to continue operating their businesses beyond the summer.