Paris Air Show, Little Flash and Lots of Introspection

Workers move an Agusta A-119 Koala helicopter into a display ahead of the opening on Monday of the 48th Paris Air Show at Le Bourget airport near Paris.

LE BOURGET, FRANCE — When the glitterati of the aviation world last gathered here, the order announcements for multimillion-dollar jets, helicopters and other high-tech hardware were so frequent that it felt like a week-long New Year’s Eve party with champagne corks popping all the time. A parade of sheiks, generals and ministers were whisked in their limousines from one contract signing to the next, leaving beaming sales executives to celebrate their good fortune.

That was 2007, when international air traffic was still growing steadily and global airline profits were on the rise, continuing the long, painful recovery from the devastating losses of $13 billion in 2001, the year of the Sept. 11 terrorist attacks. Airbus and Boeing, the world’s two leading aircraft makers, walked away with order books fat enough to keep their assembly lines humming for several years.

It seems like ancient history. When the Paris Air Show — which marks its 100th anniversary this year — opens its gates at Le Bourget, a small airport outside Paris on Monday, a record 2,000 exhibitors from 48 countries will be in attendance. But the atmosphere will be markedly different. There may still be champagne in the corporate chalets — this is France, after all — but it will be flowing a lot less freely.

The world’s airlines had a net loss of $10.4 billion in 2008 and are expected to lose an additional $9 billion in 2009. Global air traffic is falling at rates faster than those seen in 2001: The International Air Transport Association expects passenger and cargo volumes to drop by 8 percent and 17 percent, respectively, this year.

The global financial crisis, which turned from a normal economic slowdown into an all-out panic after Lehman Brothers failed in September, has devastated the industry in a variety of ways. It choked off many airlines’ access to credit. The world’s biggest jet buyer is on the auction block, a consequence of the bailout last year of its parent, American International Group. And corporate jets, once de rigueur for the world’s captains of industry and finance, have been ditched — at least for now — in a backlash against one of the most visible symbols of capitalist excess.

“The industry is not built to take this kind of stuff,” said Nick Cunningham, an aerospace analyst at Evolution Securities in London. With few airline customers in any shape to buy new planes and many considering delaying or canceling existing orders, he said, “it is inevitably going to have a serious impact on manufacturers and suppliers.”

Adding to the anxiety about the economic outlook is the sense of grief and uncertainty following the June 1 crash of an Air France jet en route from Rio de Janeiro to Paris. French and Brazilian search vessels sweeping the Atlantic Ocean have been recovering bodies and significant amounts of debris from the plane while the hunt continues for the “black box” flight data recorder, which may contain clues to explain why it went down. All 228 people who were aboard the plane, an Airbus A330-200, are presumed dead.

“It will be like a dark cloud looming over the whole show,” Jim Eckes, managing director of Indoswiss Aviation, an aviation consulting company in Hong Kong, said of the crash. “The timing could not be worse.”

French air accident investigators have yet to reach any firm conclusions for why the accident happened, but they are looking into whether a malfunction of the plane’s airspeed sensors could have played a role. Airbus had advised customers as much as two years ago to replace the sensors, known as Pitot tubes, on some of its planes with a better-performing model. The sensors on the doomed Air France jet had not been replaced.

It seems unavoidable that Airbus executives will now face questions about safety at the air show. In the days since the Air France crash, many of the 72 airlines that operate the A330 have gone out of their way to praise the plane and its safety record.

Still, in the eyes of the flying public, the A330 has taken a hit, some analysts said. “It’s very unfortunate, but this crash is going to have some knock-on effect,” said Doug McVitie, managing director of Arran Aerospace in Dinan, France. “It does take some of the shine off one of the jewels in the Airbus crown.”

Airbus has delivered 669 A330s to customers since the plane entered service in 1993, and has orders for 287 more. Since the end of 2007, more than four-fifths of the wide-body jets that Airbus has delivered have been A330 models. “That’s what’s bringing in the money for Airbus right now,” Mr. McVitie said.

Unlike the practice in past shows, neither Airbus nor Boeing will have any new aircraft models to show off this year. Airbus’s next-generation long-range jet, the A350-XWB, is still in the design phase, while its A400M military transporter — which is two years behind schedule and has not yet flown — will also be kept away from the spotlight.

The leaders of France and Germany — two of the seven European governments that ordered the A400M — said Thursday that they would need until at least the end of this year to reach a decision on what to do with the project, which is critical to the Continent’s ability to follow through on commitments to NATO operations in Afghanistan and Pakistan.

At the Paris show, it will be “the 800-pound large mammal in the corner that will be strangely quiet,” predicted Richard Aboulafia, an aerospace consultant at Teal Group, in Fairfax, Virginia. “It’s going to be a bit strange.”

For its part, Boeing will be coming without its newest flagship, the 787 “Dreamliner.” The plane — a long-range, wide-body jet made entirely of high-tech composite materials rather than aluminum — remains the company’s hottest-selling jet ever, despite two years of embarrassing production delays and dozens of recent cancellations tied to the economic downturn. Boeing has said it plans to complete the 787’s first flight at its Everett, Washington, testing facilities by the end of June, prompting speculation that Boeing might seek to make a splash with the news during the Paris show.

“The first flight of the 787 will unlock the supply chain that’s been held up for two years,” Mr. McVitie said. “It could end up being the only truly good news to come out of the show.”

Meanwhile, many airline customers will be keeping a lower profile than in past years, with few big order announcements to make. One of the few expected to make news is Qatar Airways, the ambitious Middle East carrier, which already has 200 planes on order with both Boeing and Airbus. Some Asian airlines, including AirAsia X, may pick up some Airbus A350-XWB jets.

Boeing’s and Airbus’s biggest customer, though, is likely to be sticking to the sidelines. International Lease Finance, or I.L.F.C., ran into trouble securing short-term loans last year after the near-collapse of its owner, A.I.G.

A.I.G., the troubled insurance giant, is now soliciting bids for I.L.F.C. in an effort to repay some of the $182 billion it owes U.S. taxpayers. In the past, I.L.F.C.’s chief executive, Steven F. Udvar-Hazy, was one of the higher-wattage stars of the air show, placing huge orders and grabbing the biggest headlines.

“He doesn’t have the financial backing this year,” Mr. McVitie said of Mr. Hazy. “His is a company in transition.”

While the major manufacturers are struggling to drum up new business, makers of business jets are faring even worse. Companies around the world are grounding or selling a number of their planes in an effort to cut costs and trim balance sheets. They certainly are not asking for more.

“I don’t see any corporate jet activity at all,” Mr. Eckes, of Indoswiss, said. “The corporate market is finished for the next year to two years.”

As if to underscore that point, two of the biggest builders of business jets, Cessna Aircraft and Gulfstream Aerospace, both based in the United States, will not have chalets in Paris this year. “We may be seeing a sea change in business attitudes, especially business flying,” said Howard Wheeldon, a senior strategist at BGC Partners, a brokerage firm in London. “It may or may not come back.”

For the centenary of the air show, organizers have assembled a collection of 30 vintage planes, including nostalgic crowd-pleasers like the Blériot XI, the DC-3, the B-17 “Flying Fortress” and the Lockheed Constellation. Intended to demonstrate the long arc of technological progress over the past 100 years, some analysts wondered if the exhibit might come across as a collection of old ghosts, a wistful reminder of aviation’s glory days gone by.

“For the moment, the glitter is gone,” Mr. McVitie said. “It is going to be really tough to celebrate.”