Paris Air Show goes green amid sluggish sales

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It has a reputation for disorganisation, maddening congestion, and being disrupted by monsoon-like downpours. And yet the Paris Air Show remains the signature event for the aerospace and defence industry.

If you're in the market for a fighter jet, passenger plane, satellite, or drone, the biennial show - the 51st since 1909 - is the place to be. There'll be plenty to choose from.

As with previous shows, the news flow will be dominated by the big beasts of aerospace, Airbus and Boeing.

Planemakers like, if possible, to time their multi-billion-dollar orders to coincide with air shows. But such stage-management tends to be a decision for the customers, not the suppliers.

There has, though, been an uncharacteristic lack of pre-show hype this time.

Cowen & Co analyst Cai von Rumohr says the combined Boeing and Airbus order tally for civil aircraft by the end of the week could be below the average 387 seen in the past few years.

It's possible that airlines are pausing for breath. A rush to buy aircraft after the financial crisis means that Airbus and Boeing have record backlogs of almost 12,000 aircraft. Delivery slots for new planes are years in the future.

Boeing published its closely watched annual market forecast on Thursday, and expects airlines and freight firms to take delivery of 38,050 aircraft worth $5.6 trillion (£3.6tn) by 2034. Two out of every five newly built aircraft will feed Asia's booming travel market, Boeing said.

So, if Paris produces fewer orders than usual, it's a blip not a trend.

Paris Air Show

Environment

It being a French air show, Airbus products will feature prominently. The centrepiece will be the long-range A350, which will fly displays daily. Expect Airbus to unveil orders for the aircraft, and its short-to-medium range products.

But what it really wants is more sales of the A380 super-jumbo. There have been just 317 sales since its launch 10 years ago, and questions have been asked about its future.

A big theme of this year's event is the environment. The schedule of press conferences and briefings include a lot about innovations to do with efficiency, rather than building the big new products of the future.

Top industry officials, government ministers and environmental experts will be there to discuss air travel's impact on climate change. Attendees will include Nobel peace prize co-laureate Philippe Ciais, of France's Climate and Environmental Sciences Laboratory, and France's Foreign Minister Laurent Fabius.

On the "green" theme, Airbus will be flying its E-Fan 2.0 electric prototype, which can achieve a speed of 136mph and fly for about an hour. Weighing less than half a ton, the aircraft has lithium-ion polymer batteries in its 31ft wings.

A final assembly line is being built in south west France, and the plan is for an all-electric two-seater to enter service around the end of 2017 or early 2018.

'In denial'

Air shows can sometimes look like corporate virility symbols, a chance to outdo rivals. And Qatar Airways has opted to underline its huge success in recent years by bringing five aircraft to Paris, including an A380 and a Boeing 787 Dreamliner.

Below the Airbus-Boeing duopoly are smaller planemakers, such Bombardier, Embraer, ATR and Sukhoi Civil Aircraft. Shows are important for them, as they get fewer opportunities to present their products to such a global audience.

Bombardier, which debuts two variants of its C-Series aircraft, needs orders. Shareholders are uneasy about the C-Series investment, and hoped Paris would be a turning point.

Yet, last week, Bombardier seemed to be playing down the likelihood of big deals.

New chief executive Alain Bellemare, speaking at an aviation meeting in Miami, said: "Paris, to be honest with you, it's one milestone, but it's not that critical. It's a few days in a year. It's a few days in the life of a 20-25-year programme."

Richard Aboulafia, an aerospace analyst at Teal Group, said the old Bombardier management was "in complete denial" about the C-Series' problems. He expects the new management to take a more aggressive approach to sales, offering more deals and incentives.

Terror threat

On the military side, the return of the US, the world's biggest defence customer by far, is being seen as a coup. The US military and diplomatic presence was largely absent in 2013 because of the sequestration budget crisis.

The official US presence may be discreet, however, following a warning by the US State Department.

According to a report in the Washington Times the Department has told private companies and delegates to be on guard for economic espionage and terrorism. "Transnational terrorist groups affiliated with al-Qaeda have a presence in Paris and elsewhere in France, and continue to pose a threat to American interests," the State Department said.

No US aircraft will be taking part in the 20-plus daily flying displays, although there will be aircraft on static display.

And although some big US contractors, including Northrop Grumman, will not be attending, the US will still have about 220 exhibitors in Paris, which is second only to France.

Amongst the multi-billion-dollar US hardware on show, it's a cut-price fighter jet that may receive a lot of attention.

The Scorpion, made by Textron AirLand, part of the group behind Bell Helicopters and Cessna Aircraft, uses off-the-shelf parts to keep costs down. It has yet to receive an order, though.

Another "affordable" combat aircraft likely to be received with a mixture of interest and curiosity is the JF-17 Thunder, a joint project between China's Chengdu and Pakistan Aeronautical Complex.

It, too, has no export orders, although there is speculation that Bulgaria may do a deal.

France, bolstered by April's $7bn order from Qatar for Rafale fighters, will have a big military presence. This includes two variants of Dassault's Rafale jets, and Eurocopter's Tiger attack helicopter.

Arguably the most important display will be the Airbus A400M military transport aircraft.

Plagued by delays and costly overruns, the €28bn (£20bn; $31bn) project suffered a major setback in May when an aircraft crashed in Spain, killing four crew.

The assumption was that the A400M would be grounded for the show. But Airbus said last Wednesday that it would perform displays every day this week.

An air show regular: Theo Leggett, business correspondent

Most of the time, Le Bourget Airport is a drab, tired-looking place, home to an aerospace museum and a few business jets. Then the air show rolls in.

So what's it actually like? For starters, you can barely move for VIPs. Chief executives and statesmen are out in force. The US contingent is considered low-key this year - yet it still includes the Air Force Secretary and a clutch of senators. The Alphas, of course, always come with their entourages - legions of PRs, minders, fixers and hangers-on.

This invariably leads to a degree of one-upmanship, particularly in the rows of luxury "chalets", where the major players wine and dine their clients. Boeing always has a spectacular building in a prime spot next to the runway. But it's usually dwarfed by home favourite Airbus's colossal base for the week, often with a giant A380 superjumbo conveniently parked outside the door.

Air show fashion is always entertaining. Dark suits and dark glasses dominate, especially among arms industry executives. Some delegations, notably those from minor powers, favour full military dress with acres of medals and gold braid.

Whatever you're wearing, though, the chances are it won't be appropriate for the conditions.

The summer weather in Paris is highly unpredictable. The last show was marked by torrential downpours. And I remember one year, it was so windy, people were hanging on to light aircraft on a static display to prevent them blowing over.

And what of the air displays, that breathtaking parade of super-sophisticated machinery engaged in aerobatics that seem to defy the laws of physics? Well, it's fine to watch over lunch, but for many of us, frankly, it's an inconvenience. When you're trying to work, or hold important meetings, it's just too darned noisy.