France’s aerospace sector appeared to be in total crisis following the shutdown of the aeronautics sector, and in particular the grounding of all aircraft, due to the pandemic. In July, Air France/KLM Managing Director Benjamin Smith announced layoffs of 7,585 employees until 2022 via voluntary departures and non-renewal of contracts. Air France has lost €2 billion in revenue (a drop of 40%) due to reduced air traffic, since their strategy had focused on the passenger market rather than maintaining supply to the French military.
Air France remains one of the major buyers for the French aerospace industry, which means the pandemic has had a domino effect for Air France supplier Airbus. In May, Airbus announced it would halt production of its A380 aircraft due to fuel and maintenance costs, but would still fulfill preexisting orders of the aircraft for Arab states.
Both the Dutch and the French governments have promised help to Air France. In June, French Minister of the Economy Bruno Le Maire announced a crisis budget of €15 billion to sustain the industry, with the condition that it make the transition to cleaner, low-pollution solutions in the aircraft industry as well as reducing the number of flights with duration of less than two hours—routes that could be served by trains instead.
In an August interview with Benjamin Smith on France Info radio, Smith pledged a reduction of 20%-25% in CO2 aircraft emissions and said all the airline’s ground vehicles would be electric (as well as concentrating on passengers’ health security). Alexandre de Juniac, president of the International Air Transport Association, said the industry as a whole would continue replacing current aircraft fuel with biofuel, with the goal of cutting carbon emissions by 50% in 2050.
The industry is optimistic about overcoming the current crisis, as opening borders will have an immediate positive impact on the aeronautics industry. Airbus will also concentrate on supplying the market with long-range, medium-capacity and heavy carrier aircraft such as their A320 and A350 models. The Emirates airline has switched its original order of A380 to 40 A350 instead, thus boosting production over the next 10 years.
Airbus actually saw an increase of 4.3% in its share price after the announcement, and an increase in the group's net profits of 29% to €3 billion—along with an increase of its 2018 turnover by 8% to €63.7 billion.
Notably, the pandemic has not affected the Arianespace Ariane 5 rocket launching program, which saw another rocket liftoff on July 31 from the Guiana Space Centre near Kourou, French Guiana.
This creates opportunities for U.S. suppliers to partner or directly supply French small and midsize Tier Two and Three companies that are specialized in the areas of anti-pollution, biofuels and public aircraft sanitary equipment. In addition, there is a need for high-tech solutions—in particular, materials such as carbon fiber—and environmental solutions for reduced engine noise and fuel consumption, including electric-powered ground vehicles.