Berlin is worried. The Corona crisis has caused many airlines to be short of cash. And this could have fatal consequences for Airbus.
«There is a risk that orders could be cancelled or postponed due to a lack of liquidity», explains a spokesman for the German Federal Ministry of Economics and Energy. The aircraft manufacturer employs 28,000 people in Germany. Several thousand more jobs are endangered in supplier companies.
Proven means for aircraft exports
Therefore, shortly after the outbreak of the corona crisis, the German government took a measure to help airlines and thus Airbus and its suppliers. Together with France and Great Britain, Germany decided in April to «suspend debt repayment for aircraft export financing secured by export credit agencies for one year upon request under certain conditions», as the spokesman confirms for aeroTELEGRAPH.
Export credit insurance is a proven government tool to boost exports. Specialized institutions insure the risk of payment default. In Germany, this is known as the so-called Hermes guarantee, because the insurance company Euler Hermes issues the state-backed export credits on behalf of the government.
Pegasus Airlines has benefited
Such export credits are regularly used when purchasing new aircraft. The postponement of loan repayments is now intended to help airlines to actually take over their ordered aircraft instead of postponing or even cancelling them. This protects the aircraft construction industry because a big part of the purchase price is paid upon delivery.
As the French government writes, this measure helped Pegasus Airlines, for example, to take over deliveries planned for 2020 despite the crisis. The Turkish low-cost airline took over several aircraft of the A320 neo-family in April. The measure is valid for one year for the time being, according to the German Federal Ministry of Economics and Energy. «In principle, any airline as a debtor under financing secured by export credit guarantees from the three export credit agencies - can submit an application under the initiative.»
