Airbus, Boeing begin dogfight at Paris Air Show

PARIS (AFP) - Ear-splitting air displays are the main draw for the thousands of plane enthusiasts preparing to attend the Paris Air Show this week, but the most important activity takes place on the ground.

As fighter jets demonstrate their agility overhead, a real-life dogfight between the world's biggest civilian aircraft makers, Airbus of Europe and US-based Boeing, will unfold below in the corporate hospitality stands.

The week-long bi-annual Paris event, which begins Monday, is one of the biggest aerospace events in the world and one of the most important dates in the industry's calendar.

Boeing and Airbus announced new orders worth 48 billion dollars (36 billion euros) at the last Paris show in 2005 and will be looking to clinch more business this week.

Two years ago, Airbus led Boeing in the race for new orders, but the European group has since fallen behind and is battling to solve major production and operational problems.

"Two years ago Airbus was at the top, we were the best," said recently Airbus chief executive Louis Gallois. "We are no longer in the same situation."

So far this year Airbus has announced about half the number of orders as Boeing.

At the end of May, Airbus had reported 201 new orders this year, while its US rival had 429 at the beginning of June.

Furthermore, Airbus spectacularly slipped into the red last year, reporting a loss after a profit of 2.3 billion euros in 2005, and the group has since launched a radical restructuring plan.

The group's main problem is its A380 jumperjumbo project that has fallen about two years behind schedule and has resulted in unforeseen costs of hundreds of millions of euros.

A weaker dollar has made Airbus products less competitive and its development of a mid-sized jet, the A350, has also hit problems.

Meanwhile, Boeing has gone from strength-to-strength, partly due to the phenomenal popularity of its new ultra-modern mid-sized plane, the 787, which will enter service in 2008, five years before the Airbus A350.

The US group has received nearly 600 orders for the 787 and says it has no spare production capacity until 2013.

"Our backlog is at record levels, our financial performance is solid, and we are intensely focused on delivering on our promises to customers," said Tom Downey, Boeing's senior vice president for communication, before the event.

The group said last week that it expected airlines to take delivery of 28,600 new planes in the next 20 years, illustrating the optimism in the industry about future demand.

In Paris this week, Airbus is hoping to kickstart orders for the A350 and is promising 200 new orders before the end of the year.

"It (2007) will be the year of orders for the A350," according to Airbus's sales director, John Leahy.

Qatar Airways is expected to convert its declared interest in buying 80 A350s into a firm order during the week.

And Indian group Kingfisher Airlines, which ordered five A380s and five A350s at the Paris show in 2005, has said it will place another order for more planes, which press reports say will include both models.

Industry observers will also be watching for any news on either company's plans for a new generation of single-aisled planes, which are used on shorthaul routes.

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