The French state, Toulouse, is to provide about 145 million euros (US$186 million) in 2007-2008 for the aeronautics sector in order to help aircraft manufacturer Airbus and its subcontractors, Prime Minister Dominique de Villepin said Nov. 14.
"The aeronautics sector is going through a difficult period," he said here in Toulouse, where Airbus is headquartered. "But my conviction is that we can overcome these difficulties."
Villepin said the state would provide 40 million euros in 2007 and the same amount in 2008 in reimbursable advances to Airbus subcontractors who have been hurt by delays to the A380 project. The rest of the 145 million euros would be allocated to step up research and development in the aeronautics sector, he said.
Delays in payments to Airbus sub-contractors can amount to as much as 120 days. The manufacturer was recently reported to have asked sub-contractors to accept an additional delay of 30 days. The delays cause financial headaches for subcontractors who in many cases must pay their suppliers in 30-40 days.
The problems with the A380 were behind a 195-million-euro net loss at the European Aeronautic Defence and Space company, the Airbus parent group, in the third quarter after a profit of 279 million euros a year earlier. Already, a key client, FedEx, has decided to cancel an order for 10 A380 cargo planes.
Copyright Agence France-Presse, 2006