PARIS (Reuters) – France on Tuesday launched what it billed for a € 15 billion ($ 17 billion) support plan for its aerospace industry, speeding up searches for a green airliner and warning that 100 000 French jobs could be lost due to the coronavirus crisis.

The plans – which include 7 billion euros in aid already granted to Air France AIRF.PA and advance some defense spending – involve a joint effort by government and industry to maintain French jobs and prepare the next generation of civilian aircraft.

The plans include a € 1 billion investment fund with an initial capital of € 500 million, financed in part by aircraft manufacturers Airbus AIR.PA and Dassault Aviation AVMD.PA, Safran engine manufacturer SAF.PA and the systems company Thales TCFP.PA.

“We must save our aerospace industry,” said Finance Minister Bruno Le Maire, adding that Europe – defended by Airbus – would not sacrifice its place on the world market to the American giant Boeing. TO PROHIBIT or the future Chinese competitor in the field of aircraft construction, COMAC.

The move comes after Boeing requested tens of billions of loan guarantees to help US suppliers. Airbus and Boeing are buying parts in their respective markets and fragile suppliers are seen as an Achilles heel as manufacturers weather the crisis.

However, it was not immediately clear how new the promised public-private money was. A person close to the talks admitted that this was some “wrapping”, although Le Maire insisted that only Air France aid was already planned.

In a sharp increase in funding for research organization CORAC, France said it would invest € 1.5 billion over three years to support research into environmentally friendly technologies.

FILE PHOTO: Air France Airlines planes are seen on the tarmac at Paris Charles de Gaulle Airport in Roissy-en-France following the coronavirus disease (COVID-19) outbreak in France on the 24th March 2020. REUTERS / Charles Platiau

The main focus of the investment would be a carbon-neutral successor to the A320, the best-selling jet aircraft in Europe, with hydrogen as the power source instead of petroleum-based gas turbines today.

“Our goal is to have a carbon neutral aircraft in 2035 instead of 2050, thanks in particular to an (ultra-efficient) engine using hydrogen,” said Le Maire.

EXPORT CREDIT ASSISTANCE

Industry executives have expressed doubts that a radical change from conventional jet engines would be ready for use by then, although engine makers say this is a way forward. ‘study.

France said it has agreed with Britain, Germany and Italy to a one-year moratorium on airlines repaying aircraft delivery loans guaranteed by credit bureaus to the export – an operation worth 1.5 billion euros.

The export credit system allows airlines with weak balance sheets to raise bank funds as if they had the same creditworthiness as the governments of aircraft producing countries.

It was widely used on both sides of the Atlantic to smooth exports during the financial crisis of 2008-9, but has so far played a limited role in tackling the coronavirus crisis, as the problem is mainly l collapse in global demand.

France has said it will also ask the European Commission to seek loan repayment concessions worth € 2 billion under a multinational agreement on export credits overseen by the OECD.

The “aerospace support plan” also provides for the acceleration of some 600 million euros in military purchases.

These include an order for three tankers and eight Caracal helicopters from Airbus and a modified Beechcraft propeller plane for surveillance, initially ordered in 2016. France will also advance the purchase of drones naval surveillance.

In Toulouse, the crisis-hit aerospace capital of Europe, unions hailed the plan and said a meeting scheduled to discuss restructuring with Airbus was postponed from Thursday to the end of the month, pushing it back potentially beyond the French local elections.

Additional reporting by Julie Rimbert; Editing by Alexander Smith and Mark Potter

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