France pledges to support Airbus exports

Associated Press

PARIS — France is stepping in to support its aerospace industry with a euro5 billion ($6.4 billion) plan to increase bank lending to customers of European jet maker Airbus SA, a Finance Ministry official said Monday.

The aid is aimed at helping airlines who are finding it difficult to line up financing for their purchases of Airbus aircraft, and is part of a euro7 billion package of aid for French exporters that French banks agreed to with the Finance Ministry last week.

The euro5 billion new state-backed bank financing is aimed at supporting the aeronautic industry, the official said.

The official, who was confirming French press reports, gave no further details and declined to be named, citing ministry policy.

After several years of record orders, Airbus and U.S. rival Boeing Co. are facing a drastic drop in orders this year as their customers struggle with slowing air traffic and difficulties raising credit to pay for new jets.

Airbus expects new orders to fall to between 300 and 400 this year, after booking 777 net orders last year. Boeing took in 662 orders last year.

Last week, the Finance Ministry said France’s six largest banks had agreed to a euro7 billion package of export financing as part of a deal under which the government is injecting the banks with euro10.5 billion in new capital to shore up their balance sheets and spur lending.

The French business daily Les Echos said four French banks that lend heavily to the aviation industry — Credit Agricole SA, BNP Paribas SA, Societe Generale SA and Natixis SA — are to benefit under the plan.

“We are delighted about this agreement between the state and the banks to support exports,” said Pierre Bayle, a spokesman for Airbus parent company EADS NV.

“These measures will allow us to consolidate the delivery of planes ordered for 2009,” Bayle said.

Airbus spokesman Justin Dubon said: “We welcome the efforts by governments to help restore the functioning of financial markets.”

Neither Airbus nor EADS would officially confirm how much of the French government export financing plan would benefit Airbus customers. The ministry official said euro5 billion would go to the French aeronautics sector, which Airbus dominates.

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