France has unveiled a €15bn (£13bn) rescue plan for its aerospace industry, in an attempt to preserve hundreds of thousands of jobs and shore up the manufacturer Airbus and the national carrier, Air France.
Ministers said companies would have to ramp up investment in alternative technologies such as electric and hydrogen planes as part of the bailout.
The plan includes €7bn already announced for Air France, whose fleet was almost entirely grounded during the pandemic, and whose partner KLM is being backed by the Dutch government.
The finance minister, Bruno Le Maire, said the government would do “everything to support this French industry that is so critical for our sovereignty, our jobs and our economy”, as he launched the plan alongside the transport, defence and environment ministers.
Le Maire said the deal would prevent decline and help keep Airbus competing with its US rival Boeing, as well as China’s Comac, which has threatened the global duopoly.
The bailout will help push through Air France orders of new Airbus planes, while it also includes new defence spending by the government on Airbus military products.
Unions in the UK called for a similar bailout to protect up to 1.2 million British jobs. Steve Turner, the Unite assistant general secretary for manufacturing, said: “The French government is absolutely right to act to protect French aerospace and aviation skills and jobs while also delivering on climate change commitments. This is precisely the sort of intervention we quickly need to see from the UK government to preserve jobs.”
Cathay Pacific has become the latest airline to receive a state bailout to survive the coronavirus pandemic, with the Hong Kong government taking a stake in the carrier as part of a HK$40bn (£4bn) rescue plan.
Cathay was one of the first airlines to suffer a collapse in traffic as coronavirus emerged in China, where most of its flights operate. A new government-controlled company will take a 6% stake as part of a share offering, and it will also loan the carrier a further HK$7.8bn.
About 90% of staff at the embattled carrier have taken unpaid leave while 600 head office jobs were cut last month, after Cathay grounded the majority of flights earlier in the year. Its business was already hit by falling passenger numbers in the wake of the pro-democracy protests last year.
Hong Kong’s financial secretary, Paul Chan, said the government did not intend to be a long-term shareholder in Cathay and would not get involved in the operations and management of the airline.
According to figures released on Tuesday by the global aviation body, Iata, bailouts have contributed to airline debts that have risen by $120bn during the crisis to a total $550bn (£432bn).
Iata warned that airlines were heading for a collective loss of $84.3bn in 2020, the biggest in the sector’s history.
