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Last Updated: Monday, 17 July 2006, 18:05 GMT 19:05 UK
Military firms eye up contracts
By Jorn Madslien
Business reporter, BBC News, Farnborough Airshow

Businessmen and officers at the Farnborough show
Big deals were done in the sun at this year's show

Forget the heat wave that is sweeping Britain; it is all business as usual at the Farnborough International Airshow, with most people donning suits and ties.

The British aerospace industry is booming; the value added to the UK economy from the sector's commercial and military sales rose 5% in the last year, according to Department of Trade and Industry figures.

Much of the growth comes from the US, where military contracts in particular have proven attractive for British and European manufacturers.

Take BAE Systems, which clocked up sales of $28bn (15bn) last year. Almost a third of it came in the form of contracts with the Pentagon.

Impressive hardware

Thus there is one notable exception to all those in suits at Farnborough, namely the ones in uniforms representing a number of the world's armed forces.

Bell Boeing V-22 Osprey tilt-rotor
The V22 Osprey is one of the more unusual aircaft on show

For many of Farnborough's exhibitors, these chaps, many of whom work in military procurement, are the ones to charm.

And there is plenty here to impress them, ranging from the spectacular Bell Boeing V-22 Osprey tilt-rotor aircraft - which is a mixture between a plane and a helicopter and thus requiring super-skilled pilots - to unmanned mean-machines from Northrop Grumman and BAE Systems.

And then there are the fighter jets, like the Super Hornet from Boeing, the Mig-29 or the Gripen, all whirling at great expense over the crowd of G&T or mineral water sipping aerospace professionals, some with bonuses in sight, others with money to burn.

Pulling in the dollars

The EADS subsidiary Eurocopter is also turning heads at the show, mainly because it has landed a spectacular contract.

The US army recently signed up for 322 of the Franco-German chopper maker's Light Utility Helicopter.

A Gripen pilot treated the crowds to an aerobatic display

In a sense, the deal marks the firm return of Old Europe following a now distant-seeming spat between President George W Bush and the French and German leaders over the Iraq war.

But more importantly, at least for the company itself, the $3bn deal marks Eurocopter's first foray into the US military market.

EADS, which is also eyeing a major contract to replace the US Air Force's tanker aircraft, can only hope that the deal marks a softening in attitudes towards the European giant.

Shiny airport

Away from the military arena, companies making smaller aircraft for business users were optimistic.

Arms and aircraft on display at the show

Bombardier has released its market forecast for the first time, and it is bullish reading.

The Canadian plane maker predicts that 600 to 700 corporate jets will be sold each year in both 2007 and 2008.

And that is a trend that is welcomed in Farnborough itself, where a shiny new glass and steel airport that specifically caters for the business user has been opened.

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