French aviation companies get a life line
Earlier today, we discussed how one of the most important European air carriers,Lufthansa, received a second stimulus package from the Austrian government, after last month it got one from Germany.
But things aren't simple when it comes to fighting the pandemic's effects on a larger scale. Although companies worldwide received help from their respective governments, France has decided to do more. Yesterday, the French Economy Minister announced that France would support the aviation industry and companies such as Airbus and Air France, with almost $17 billion. He believes that Europe cannot be behind US and China as far as the aerospace race is concerned, just because the industry took a hard punch from the pandemic.
Air France will receive $7.9 billion. For the research and development of creating a carbon-neutral aircraft, $1.7 billion will be allocated by 2035 from the previous 2050. Also, the money will go to saving the jobs of manufacturers from Airbus and Dassault. Component suppliers Safran and Thalès are included.
As part of the stimulus, the companies will be able to postpone the reimbursement for 18 months, compared to the usual six.
The aviation industry needs all the support it can get because, according to the International Air Transport Association (IATA), it will lose $84 billion only this year and another $15 billion in 2021. The domestic flights will still be 30% lower than the 2019 threshold, but cargo flights will increase significantly.
The Airbus stock target price reached $80, and during the current trading session, the price went up by more than 0.70%. Air France lost more than 5%.
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Sources: flightglobal.com, edition.cnn.com
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