The French state will prop up European planemaker Airbus with a €5 billion loan to be run through banks known to lend to the aeronautical industry, according to Monday's edition of "Les Echos" and confirmed by official sources.
REUTERS - The French state plans to inject 5 billion euros ($6.5 billion) into banks with the aim of financing airplane purchases to help European planemaker Airbus <EAD.PA>, a French government source said on Sunday.
"There is indeed a plan to lend 5 billion euros to the banks to finance Airbus contracts," the source said, confirming an earlier report in the business newspaper Les Echos. The source gave no further details.
The newspaper said the state would inject the money into banks with a record of lending to the aeronautical industry. It named Calyon <CAGR.PA>, Societe Generale <SOGN.PA> and BNP Paribas <BNPP.PA>.
"The aim is to prevent airlines from cancelling orders citing difficulties in raising money," said the newspaper, which did not give its sources.
The report was on the front page of the newspaper's Monday edition, which was sent to media in advance on Sunday.
A French industry source said the plan, which appeared to have originated from the prime minister's office, would provide help on a broad basis to the banking industry and aerospace was one of several industries expected to benefit directly or indirectly.
Airbus could not be reached for comment.
The planemaker said on Jan. 15 deliveries could fall and orders were set to tumble as the global recession curbs demand for jetliners.
Both Airbus and rival Boeing <BA.N> are bracing for more turbulence in an industry damaged by recent fuel price spikes as the economic downturn hits air travel. They also face a battle to prevent airlines cancelling or deferring orders.
Date created : 2009-01-25