Sector Report: the Aviation Industry in France

2584 WordsNov 30, 200911 Pages
1. Introduction The aerospace industry is a sovereign, high-tech, performing industry, which is essential for the French economy as it creates prosperity for the country and aggrandizes its international reputation. France’s export success is the evidence that its products own the necessary quality and competitiveness, as more than 75 percent of its consolidated incomes are realized through exportation. This industry profile is a useful tool to help investors understand the emergence of the French aerospace industry, as it aims to analyze the evolution of the sector and the influence of different factors and developments on its existence. The French aerospace industry is divided in six different market segments: civil and military…show more content…
The development of the aircraft required enormous investments to around €12 billion. Up to now, in its second life year, 200 orders have already been made and 13 A380’s have been delivered. Off course, this is insufficient to regain the huge development costs and everything depends on the success of the first A380 planes. Nonetheless, as the world passenger traffic and congestion of airports increases each year, it is almost certain that new orders on the A380 will soon be placed, especially by emerging countries such as China and India. 2.1.4 Investment in R&D According to the Invest in France Agency, French aerospace companies invest more than 16% of their turnover in R&D activities in order to prepare for the future and to preserve their place in a highly competitive environment. This is more than their competitors in other countries. In order to keep developing competitive products, the French industry players have joined forces in 2 ambitious research programs: Clean sky (EU level) and an agreement with the ministry of ecology and sustainable development to establish a Civil Aeronautics Research Council. Various new technologies and breakthrough inventions have been developed for the A380, making it the world’s most advanced and efficient airplane. 2.2 Weaknesses 2.2.1 Governmental support The financial budget of the French government available for aerospace companies is quite small, in comparison with the government support in the United States.
Open Document