Alex Ustinov | Dreamstime
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After Aid Package, Airbus Vows No More Cuts

June 12, 2020
The aerospace group is slashing output by 33%, but no more, after the French government put forth a $17-billion plan to support the domestic aircraft and defense industry.

Airbus SE remains on track to cut its overall production rate by 33%, a plan set out in April, but now the OEM reports it has no plans for further reduction.  "For the time being there is no need to change what we have announced in April, and we expect relative stability in our production planning," Airbus confirmed in a statement.

That assurance may be a gesture of gratitude to the French government for having issued a $17-billion aid package to the French aerospace sector. Airbus, like its rival Boeing, is enduring a sudden crash in new aircraft orders and cancellations of previously booked projects by airlines struggling with the sudden collapse in air travel resulting from the COVID-19 pandemic. The effects are felt throughout the aerospace supply chain, hitting smaller suppliers especially hard, and hampering the ability to keep production programs operating reliably.

"We welcome the strong plan announced today by the French government," Airbus offered. "It represents an important milestone for both our commercial aircraft business, which is facing a significant reduction in production of around 40%, as well as for our defense businesses which protect national sovereignty."

The French "Plan de Relance" (Recovery Plan) is a wide-ranging effort to protect the country's aerospace sector and preserve as many of its 300,000 jobs as may be possible. It includes €7 billion ($7.9 billion) in aid to Air France; and a €1 billion ($1.13 billion) investment fund with contributions from Airbus and Dassault Aviation as well as the Tier suppliers Safran and Thales, to support small and midsized enterprises.

The French package also includes a €1.5-billion contribution to developing a carbon-neutral commercial aircraft, an Airbus program already underway but one with a 30-year horizon.

“Our target is to have a carbon-neutral airplane in 2035 instead of 2050, thanks especially to an (ultra-efficient) engine using hydrogen,” finance minister Bruno Le Maire said.

In addition, France promised to press the European Commission to secure repayment of export credits due to Airbus for past aircraft deliveries, and worth a reported €2 billion ($2.25 billion.)

Further, the plan accelerates about €600 million ($676 million) worth of previously allocated funds for French military contracts, including three air tankers, eight helicopters, and several naval surveillance drones.