Paris Airshow Underscores Bleak Times For Industry

The world's biggest airshow next week may see more soul-searching than orders as the industry wades through an economic crisis overshadowed by the worst crash in eight years.

Aviation followers have grown used to a ritual annual order showdown between Airbus and Boeing, with orders worth USD$62 billion a year ago, but few announcements are expected this year as airlines are bludgeoned by recession.

Russian civil aviation is set to steal the show with the Sukhoi Superjet 100 regional jet displayed for the first time outside Russia on Monday at Le Bourget, which alternates every year with the Farnborough Airshow in the UK.

The first post-Soviet airliner upstages Western projects hit by production delays, such as the Boeing 787 Dreamliner which could make its maiden flight in coming days or weeks.

The world's airlines are expected to post 2009 losses of USD$9 billion, according to the latest forecast from the International Air Transport Association, which called the current crisis "the most difficult situation the industry has faced".

"Given the limited visibility, we are not expecting there to be any bold statements about a recovery (in airlines) at this stage," Macquarie Research analyst Rob Stallard said in a note.

Many airlines are deferring orders due to lack of financing for final payments, though Qatar Airways has said it will make a "major announcement" likely to be a plane order at the show.

Air travel received a further blow this week as health authorities declared the world's first influenza pandemic for 40 years and warned of a long-term battle against the new H1N1 flu virus.

Eyes will also be on further clues on the cause of an Airbus A330 crash on June 1 that killed all 228 people aboard. Operator Air France has said the airline is in a state of shock over the worst disaster in its 75-year history.

Questions have centered on the aircraft's speed sensors, known as pitot tubes, and Air France is replacing old sensors as a precaution -- though its chief executive is not convinced yet that the sensors were to blame.

Defense contractors meanwhile are bracing for program cuts by the biggest military spender, the United States, where the administration of President Barack Obama has outlined plans to halt or reduce weapons projects.

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European aerospace and defense group EADS, parent of Airbus, is unlikely to be able to give more clarity on the military A400M airlifter after governments said this week they needed a further six months to decide on its future.

With few fireworks expected in terms of plane orders and defense programs, companies may use the airshow to talk about investments in partnerships, acquisitions, technology and the environment, industry watchers said.

The organizers stressed that all the exhibition areas had been rented out for this year's airshow, marking the 100th anniversary of the event, which had nearly 2,000 exhibitors and 400,000 visitors two years ago.

"I expect to see the big players of the industry placing their bets, articulating their strategies on how they are planning to strengthen their presence into the service business," said Damien Lasou, Paris-based managing director with global consulting and technology services company Accenture.

"I expect as well to understand how these companies are shaping their new offering, shifting from selling a product to selling a solution," he added.