Plenty of reasons to be gloomy at Paris Air Show

In an ominous sign of how much the business-jet market is hurting, manufacturers Gulfstream and Cessna aren't even showing up.

Lion AMP30 plane 88 248 (photo credit: )
Lion AMP30 plane 88 248
(photo credit: )
The Paris Air Show opens Monday under a morose, uneasy cloud. Already reeling from the global recession, the aviation industry gathering in the city where Air France Flight 447 should have landed only two weeks ago has been shaken by the still unexplained crash. Pilots of the doomed Airbus A330 en route from Brazil to Paris did not even have time to make a Mayday call before their plane plunged into the sea, killing all 228 people aboard. "The aviation community is still under some shock with the severity of this accident," Airbus CEO Tom Enders said Saturday. Investigators have another two weeks to find the flight recorders before signals emitted by small beacons attached to the boxes start to fade. Without them, the cause of the accident may never be fully known. The crash "has traumatized people," said Gerard Feldzer, a former A330 pilot for Air France who now heads the Air and Space Museum at Le Bourget Airport, near Paris, where the air show is held. He said it's hard for air travelers to accept that "zero fault doesn't exist." The Paris Air Show is marking its 100th anniversary, although because it alternates every other year with the Farnborough International Air Show outside London, it is only on its 48th edition. It opens to industry and the press on Monday, and then to the public June 19-21. Despite the gloomy economic climate, organizers expect close to 300,000 visitors this year, half of them professionals, about the same as the last show in 2007. On display will be more than 2,000 exhibitors from 48 countries. The traditional dogfight over orders between rival plane makers Boeing Co. and Airbus SA has been tempered as the world economic crisis forces airlines to cancel or delay plans to buy planes. Tight credit markets have made it more difficult for potential customers to secure financing. The International Air Transport Association has warned that the world's airlines will collectively lose $9 billion this year. "It is a very difficult time today, there's no question about that," Randy Tinseth, head of marketing at Boeing's commercial division, said Friday. Louis Gallois, head of Airbus's parent company, EADS, said there could be worse to come. "2010 and 11, perhaps 11, will be more critical," he said. So far this year, Boeing, which is cutting 10,000 jobs, has taken orders for 73 planes, but with cancellations of 66, the net order intake is only seven jets. Airbus, which hasn't announced extra job cuts but had already been cutting payroll in a restructuring program launched in 2007, has booked fewer orders, 32, but with fewer cancellations has a better net balance of 11 jets. Still, both plane makers are cushioned by order backlogs of about 3,500 planes. In an ominous sign of how much the business-jet market is hurting, manufacturers Gulfstream and Cessna aren't even showing up. Embraer, the world's fourth-largest plane maker, which laid off 20 percent of the company's workforce in late February, will have a "minimal presence" at the show to curb costs, said spokesman Stephane Guilbaud. Analysts said they expect a trickle of orders, possibly from Persian Gulf airlines financed by deep-pocketed patrons, or bargain seekers such as no-frills airline Ryanair. Akbar al-Baker, the head of Qatar Airways, said the company would make "further announcements" at the Paris Air Show, suggesting it could add to plans for more than 200 planes worth more than $40b. in the coming years. "It's the best possible time to negotiate," said Diogenis Papiomytis, an analyst with Frost & Sullivan. "But the air transport industry isn't always the most logical business. It's emotional, and right now it's the worst possible time for the industry." To mark the centennial show, 30 historic aircraft from various aviation epochs will be on display, including a Bleriot XI, a plane shown at the first Paris Air Show in 1909. Plane spotters will be entertained with demonstration flights, including an Airbus show Wednesday to mark the plane maker's 40 years. But few new aircraft will be presented; visitors will have to be content with the first appearance outside Russia of Sukhoi's new Superjet 100. Airbus's and Boeing's newest aircraft, the A400M military transport plane and Boeing's 787 jetliner, won't be making an appearance as both planes are late, having been dogged by a series of problems. Boeing's Pat Shanahan will give an update on the 787 on Tuesday. The new long-range wide-body is going through more tests as it prepares for its first flight by the end of next month. EADS has indefinitely postponed the first flight of Airbus's A400M transport and is now negotiating new technical requirements and commercial terms with the seven European NATO countries that first ordered the plane.