US defense companies woo buyers in Paris

June 17, 2009 6:25:31 AM PDT
American defense contractors elbowed into the troubled market for European military transport planes at the Paris Air Show on Wednesday amid scarce orders for commercial planes for rivals Airbus and Boeing. Plunging passenger numbers and tight credit have scaled back business at the world's biggest air show this year, which has also been haunted by unresolved questions about the crash of Air France Flight 447.

So far, Airbus has made $6.1 billion in sales of 55 aircraft at the air show, well below the order tally in recent years. Archrival Boeing Co. has yet to place a single order at the show, which opened Monday.

As delays mount for Airbus' troubled new A400M military transport airlifter, Lockheed-Martin and Boeing are offering their proven C-130J and C-17 models as alternatives to the European air forces who are in urgent need of a new transport.

"The situation is that many countries in Europe are looking at their airlift requirements and they need to make decisions in the short term," Peter Simmons, spokesman for Lockheed's Air Mobility division, said Wednesday. "We have been approached by a number of countries in Europe to fulfill that role."

Boeing also says it has held talks with members of the seven-nation consortium involved in the Airbus program.

The A400M transporter program was launched in 2003 with a joint order for 180 planes from Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey. But Airbus missed a March 31 contractual deadline for the first flight, and is negotiating new technical requirements and commercial terms with the seven buyers.

The costly delay is especially painful for recession-hit governments.

Boeing is also setting its sights on a new bid for a U.S. Air Force contract. Boeing Vice President Dave Bowman, the head of air refueling tanker programs, said his team is "pumped and ready to rock" when the U.S. Air Force issues its request for offers in the coming weeks.

U.S. Defense Secretary Robert Gates plans to restart the troubled process of replacing the Air Force's aging fleet of planes that gas up other jets in mid-flight.

Gates canceled the competition after the U.S. Government Accountability Office faulted the Air Force's selection last year of a team composed of Northrop Grumman Corp. and Airbus parent European Aeronautics Defense and Space Co., saying the service had unfairly slanted the process against rival bidder Boeing.

On the commercial front, Asian and low-cost airlines defied worries about the global recession and placed dozens of orders with Airbus.

Kuala Lumpur low-cost airline Air Asia ordered 10 A350-900 jets and placed options for five more. The list price for the 10 jets would be $2.4 billion. Vietnam Airlines ordered 16 Airbus A321 single-aisle jets worth $1.4 billion and pledged to buy two more A350-XWB planes.

Boeing's vice president for international corporate communications, Charlie Miller, shrugged off the Airbus announcements, saying the company doesn't save up orders to announce at air shows.

Russia's Sukhoi won attention and domestic orders for its new SuperJet 100, in a bid to revive the country's civilian aircraft industry. Regional aircraft makers Bombardier and France's ATR sold planes to Spanish carrier Air Nostrum

At a news conference Wednesday at the headquarters of the French air accident investigation agency BEA, investigators said more than 400 pieces of Flight 447 have been found but they still have reached no conclusions about what caused the May 31 crash that killed 228 people flying from Rio de Janeiro to Paris.

The Paris Air Show is marking its 100th anniversary. It opened to industry on Monday, and then to the public Friday to Sunday.

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Associated Press writers Emma Vandore and Greg Keller contributed to this report.

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