France Ramps Up Arms Orders to Support Defense and Aerospace Sector

Paris – France will speed up planned orders worth €600 million ($681 million) of military aircraft and double funding to €100 million for an investment company which seeks to protect small firms of strategic importance, the armed forces minister said June 9.

Florence Parly outlined the measures as government ministers presented a €15 billion support plan for the aerospace industry, reeling from the pandemic as airlines slashed orders for Airbus and Boeing airliners and sought delayed delivery.

The cut in deals and delivery has hurt prime contractors, and small and medium companies in the dual civil and military purpose supply chain. The package included an announced €7 billion of support for Air France, the flag carrier airline.

“To support companies in the sector, the armed forces ministry will work two levers,” Parly said.

“The first will be €600 million of military orders which we have decided to speed up.”

Fast Track for Air Tankers

The measures include a fast track order worth €200 million for three Airbus A330 Phénix multirole transport tanker jets, with delivery in 2021 and 2022, the ministry said. No information was available on the date for the orders.

The order for those three units had been planned for 2026, in the next multiyear military budget, completing a 15-strong fleet of air tankers. Airbus delivered the first two A330 MRTTs to the French air force last year.

Those aircraft will replace an aging fleet of C-135R and KC-135Rs refuelling jets, and A310 and A340 troop and transport aircraft.

An order worth €300 million will be placed for eight Caracal Airbus H225M helicopters, with deliveries in 2023 and 2024, brought forward from 2028 and 2029, the ministry said. These helicopters will replace the Puma, which had been due to stay in service to 2028, but will be retired five years earlier.

The average age of the Puma was 40 years, said Parly, adding the air force will receive new aircraft, which will cut maintenance cost.

An order worth €60 million for a light surveillance aircraft will be placed in 2023, brought forward from 2027, the ministry said.

More Airborne Drones for Navy

Some €50 million has been earmarked for orders of SMDM mini surveillance drones and SDM airborne drone for the navy, the ministry said.

The Direction Générale de l’Armement is holding contract talks on the mini drone, a spokesman for the procurement office said. An initial order had been for some 20 systems, and a further six systems have been added. A system comprises two units. The value of the deal was not available.

Deliveries of the mini drone are due in 2022-25, the ministry said.

Survey Copter, a unit of Airbus, supplies the mini drone.

The DGA is to acquire a second SDM airborne drone in addition to the first unit, with a campaign of flight tests in 2021, the spokesman said. The two units will allow a more complete 18-month campaign to “mature” the technology.

Flight tests of a naval airborne drone were due in 2021, with flight trials to be made on a multimission frigate, the ministry said on the unmanned aerial vehicle in a note on the 2019-25 military budget law. The note carries a picture of an Airbus VSR 700 drone, which Airbus has presented at a previous Paris air show .

The military budget law sets 2027 as the operational date, but industry is working on an earlier date in case the government brought that forward, Naval Group said in a statement March 10 2019.

Naval Group works with Airbus on the VSR 700 drone, which would fly from warships such as the multimission frigate and Mistral class helicopter carrier.

The naval airborne drone was due to be delivered by 2028, the ministry said on the military budget law.

New Timetable for Aerospace Industry

The government was in talks with industry on changing the “schedule of orders,” with Dassault Aviation as an important company, as the supply chain for the Rafale needed support, Parly said.

“I have to make decisions in the next few weeks,” she said.

France was due to resume taking deliveries of the Rafale in 2022, with Dassault due to ship the remaining 28 units of the 180 units ordered so far.

A French order of an estimated 30-strong batch of Rafale, dubbed tranche 5, had yet to be made. Deliveries of those aircraft could start in 2025 if an order were placed.

The present Rafale production at Mérignac, just outside Bordeaux, southwest France, was committed to export clients, and it remained to be seen how the foreign delivery schedule could be maintained under the virus crisis.

Dassault forecast Feb. 27 delivery of 13 export Rafales this year, having shipped a total 49 units to foreign clients, with 47 on the export order book. France has sold the twinjet fighter to Egypt, India and Qatar.

Investment Boost

On the financial front, the government will double its funding to €100 million in Definvest, a government-controlled investment company which takes a stake in high technology companies. The government set up Definvest to fend off foreign investors seeking to take control of sensitive technology being developed by small and medium companies.

The 2019-25 military budget law set aside “the lion’s share” for the aerospace industry, with €19 billion earmarked for fixed wing aircraft, helicopters and drones, Parly said. A similar amount was pledged to service for aircraft.

Annual spending in aerospace programs will rise to €3.5 billion in 2025 from €2 billion in 2019, she said. Some €2 billion will be spent on combat jets in the former.

Those speeded up orders for military aircraft and investment measure were part of a wider support plan, which sought to mitigate the effects of coronavirus.

“Confronted with the Covid-19 pandemic and the breadth of consequences previously unknown in world air travel, the French aerospace industry has been in an existential crisis for several months,” Gifas, the aerospace trade body, said in a June 9 statement.

Gifas welcomed the government support plan, which sets up a €1 billion investment fund to help medium-sized companies and invest €1.5 billion in environmentally friendly aircraft technology.

The difficulties at Boeing over its B737 Max airliner had already hurt the French aerospace sector, and Airbus has announced a 35-40 percent cut in production due to the slowdown in the airline market, the association said.

After the 2008 financial crisis, France brought forward arms orders worth some €2.4 billion, including a third Mistral helicopter carrier and the VBCI armored troop carrier.