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Last Updated: Sunday, 15 June, 2003, 10:37 GMT 11:37 UK
Trouble in the air at Paris
By Theo Leggett
BBC World Service business reporter

Despite the sunshine, gloomy clouds are hanging low over the Le Bourget airfield on the outskirts of Paris on Sunday.

The biennial Paris airshow is usually the key event in the aviation calendar - a chance for the big aerospace companies to schmooze up to their customers and show off to their rivals.

Airbus are in competition with Boeing
But a diplomatic row between France and the United States, the crisis in the aviation industry, and the Sars outbreak risk taking the gloss of the event, which opened its doors on Sunday.

For the first time ever, there will be no air displays by US aircraft, and many senior executives from major defence contractors such as Raytheon and Lockheed Martin are expected to stay away.

Defence analysts say the Pentagon has been actively discouraging contractors from coming to the show - and the pressure appears to have paid off.

The number of US companies attending is down by a third compared to the last show in 2001.

One company which won't be boycotting the show is Boeing, which risks losing its position as the number one supplier of commercial aircraft to its great rival, Airbus.

The diplomatic tensions and economic pressures have certainly taken some of the gloss off this year's event
Both manufacturers are feeling the effects of the crisis in the airline industry.

Over the past two years, the global economic downturn and fears of terrorism have sent passenger numbers tumbling, while more recently the outbreak of the Sars respiratory illness has also taken its toll.

Many airlines have been cutting back their fleets - and with little demand for new aircraft, the manufacturers have been forced to sell their products at a substantial discount.

There's no doubt that some large orders will be signed at the show - but they're likely to be far fewer than in years gone by.

The diplomatic tensions and economic pressures have certainly taken some of the gloss off this year's event, which had been billed as a celebration of 100 years of powered flight, a century after the Wright brothers took to the air for the first time.

But in one respect, Le Bourget appears to be living up to expectations.

In the run up to the event, a row erupted between the UK defence contractor BAe Systems and its French rival Thales.

BAe insisted it had rejected a merger approach from Thales; the French company denied it had ever raised the matter.

Gossip and intrigue are traditional elements of the Paris show - and some things, it seems, never change.





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