The bailout will help push through Air France orders of new Airbus planes, while it also includes new defence spending by the government on Airbus military products. Credit: Handout.

Finance minister Bruno LeMaire has launched a much-needed rescue plan for France’s devastated aerospace industry in the wake of the coronavirus pandemic.

In an attempt to preserve hundreds of thousands of jobs and shore up manufacturer Airbus and national carrier Air France, France unveiled a €15 billion (almost US$17 billion) bailout plan, The Guardian reported.

According to the plan, companies would have to ramp up investment in alternative technologies such as electric and hydrogen planes as part of the bailout.

The plan includes €7 billion already announced for Air France, whose fleet was almost entirely grounded during the pandemic, and whose partner KLM is being backed by the Dutch government, the Guardian reported.

LeMaire said the government would do “everything to support this French industry that is so critical for our sovereignty, our jobs and our economy,” as he launched the plan alongside the transport, defence and environment ministers.

The government hopes the deal will prevent decline and help keep Airbus competing with its US rival Boeing, as well as China’s COMAC, which has threatened the global duopoly, the Guardian reported.

The bailout will help push through Air France orders of new Airbus planes, while it also includes new defence spending by the government on Airbus military products.

The aeronautical sector is one of the biggest employers in France, providing 300,000 direct and indirect jobs in manufacturing, research and development, the New York Times reported.

A third of those would have been wiped out if the government did not step in, LeMaire said, adding that preserving jobs was the top priority.

Unions in the UK called for a similar bailout to protect up to 1.2 million British jobs, The Guardian reported.

Steve Turner, the Unite assistant general secretary for manufacturing, said: “The French government is absolutely right to act to protect French aerospace and aviation skills and jobs while also delivering on climate change commitments. This is precisely the sort of intervention we quickly need to see from the UK government to preserve jobs.”

Cathay Pacific has become the latest airline to receive a state bailout to survive the coronavirus pandemic, with the Hong Kong government taking a stake in the carrier as part of a HK$40 billion rescue plan, The Guardian reported.

Cathay was one of the first airlines to suffer a collapse in traffic as coronavirus emerged in China, where most of its flights operate. A new government-controlled company will take a 6% stake as part of a share offering, and it will also loan the carrier a further HK$7.8 billion.

About 90% of staff at the embattled carrier have taken unpaid leave while 600 head office jobs were cut last month, after Cathay grounded the majority of flights earlier in the year.

Its business was already hit by falling passenger numbers in the wake of the pro-democracy protests last year, The Guardian reported.

According to figures released by the global aviation body, the International Air Transport Association, bailouts have contributed to airline debts that have risen by US$120 billion during the crisis to a total US$550 billion.

France has spent hundreds of billions of euros on paid furlough programs intended to prevent mass unemployment, The New York Times reported.

The measures announced this week would allow employers to tap government-paid furlough schemes, and come on top of an ‎‎€18 billion support package for the battered tourism industry and ‎€8 billion in aid to Renault and other French manufacturers in the auto sector.