France - Country Commercial Guide
Civil Aircraft and Parts (AIR)

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-10-12

Overview

 

2018

 

2019

 

2020

(Estimated)

2021

(Estimated)

Total Market Size

29,75

30,37

26,23

28,17

Total Local Production

59,35

60,70

39,22

43,34

Total Exports

50,38

50,96

25,88

29,47

Total Imports

20,78

20,63

12,89

14,30

Imports from the US

3,58

3,51

1,98

2,57

Exchange Rate 1 Euro

USD 1.18

USD1.12

USD 1.14

USD 1.20

(total market size = (total local production + imports) - exports)

Figures in USD billions. Sources:  GIFAS, USDoC, French Customs.  Note: French Customs figures are quoted in CIF (HS 8802 + 8803), USDoC figures are quoted in FAS.  * indicates unofficial estimates based on various industry sources. Year to year figures subject to currency fluctuations.

Reported revenue for the French civil aerospace industry in 2020 fell to €34.4 billion (source: GIFAS – USD 39.2 billion), out of total non-consolidated aerospace and defense aerospace revenues of €50.9 billion - this is a 45% decrease over 2019. The aerospace and defense aerospace industry exported approximately 66% of its consolidated turnover, and the civil sector represents 68% of revenues.  Civil aviation orders in 2019 were down to €16.6 billion, a drop of a massive 64%. Business aviation suffered as well, whereas the helicopter segment remained steadier. In terms of air traffic, Europe, as a region, was the hardest hit in the world, with traffic down by –63.5% in 2020.

Despite these dire statistics, there were no real structural problems in the French aircraft industry before 2019, as strong yearly figures show.   While the industry is expected to grow only slowly (if at all) in 2021, production should ramp back up beginning in late 2023 and then rise sharply to meet growing demand.

2020 was marked by worldwide air traffic practically at a standstill, with aircraft production and deliveries strongly impacted.  Massive French governmental aid to the industry has succeeded in keeping R&D flowing, has shored up suppliers, and has minimized job layoffs, although there have been thousands.  Airbus expects its commercial aircraft market to recover to pre-COVID levels between 2023 and 2025, led by the single-aisle segment. Beyond that, French manufacturers and the supply chain are expecting a very sharp ramp-up in production.  New zero-emission aircraft designs may provide good opportunities for competitive U.S. companies in the years to come.

Five aircraft manufacturers account for most of the French market: Airbus (large commercial aircraft), Airbus Helicopters, Dassault Aviation (high-end business jets), ATR (passenger and cargo turboprop aircraft for regional transport, an Airbus JV with Italian firm Leonardo), and Daher (TBM and Kodiak light aircraft and business turboprops). There is also a growing ecosystem of small manufacturers offering light electric or hybrid aircraft or vehicles suited for urban air mobility.

Because of the breadth and depth of the aerospace industry in France, U.S. manufacturers often decide to use the services of a distributor or agent to reach out to many potential customers. It is generally difficult to break into the business (with some exceptions based on product type) without local representation that can interface with the various layers of engineers, purchasers, and supply chain quality managers. In France, it is normal business practice for manufacturers’ representatives to work on retainer only or a mixed retainer/commission fee; rarely will an agent accept a commission-only contract to develop new business.  U.S. firms must be prepared to invest significantly in their business development process over extended periods before generating any orders. AS9100/ISO 9001 certification would be considered the minimum requirement for doing business in the aerospace supply chain in France.

Leading Sub-Sectors

A significant technology shift is taking place in aerospace in France – the current market difficulties and the resulting French Government aerospace assistance plan has accelerated it - and that is to move to producing a zero emissions aircraft by 2035, a very ambitious goal.  It is usually new aircraft development, driving new design and technology requirements, which create opportunities for potential suppliers.

The best prospects for American firms in this market continues to be those associated with the manufacturing of new aircraft or engine models or very technical products.  Disruptive hydrogen or electric propulsion energy technologies applied to aircraft and any products or technologies allow an aircraft to use less energy, including lighter or more fully optimized onboard equipment, new light-weight materials, or more intelligent flight management systems example, should do well.

Opportunities

Typically, the French aerospace market provides many opportunities (less so in the next 2-4 years but will again) and is considered highly competitive.  Potential new suppliers must target the right tier and understand clearly what their value-added is compared to those already in place in the supply chain and must understand they will be competing with companies from around the world, not just in France.  Many major French firms like Safran, Airbus, or Dassault are all present in the US and have sourcing offices, which may be an easier path to receiving OEM approval.

Future aircraft will increasingly include more electric systems on board. They will move to hydrogen as a primary fuel, although other technologies such as hybrid electric or bio/synthetic fuel options are on the table in the interim.  The decision on which technology to pursue to achieve a narrow body carbon-neutral aircraft should be made in 2025, for a launch in 2027-2028 and entry into service by 2035.  Airbus is looking to field a successor to the A320 or perhaps a regional aircraft, and other French manufacturers are also considering hydrogen hydrogen-fueled rotorcraft and business jets. Other technologies of interest include Enhanced Vision Systems, autonomous systems, and specialty materials.

It is important to keep in mind that beyond French-made aircraft, French equipment suppliers are also working globally, on Embraer, Pilatus, Comac, Mitsubishi aircraft, etc., as well as all the major U.S. aircraft manufacturers. However, entering the French market requires patience, investment, innovative products, and competitive pricing.

Resources

  • Aeromart Toulouse Supply Chain Business to Business Meetings
  • bciaerospace.com/toulouse/
  • Paris Air Show
  • French Aerospace Industries Association GIFAS

Contact: U.S. Embassy - U.S. Commercial Service Commercial Specialist:

Cara.Boulesteix@trade.gov; Tel: +33 (0)1 43 12 70 79