Author`s name Alex Naumov

World's most prestigious air show opens at Le Bourget

The 47th International Paris Air Show on June 18-24 will host 2,000 companies from 42 countries, including 60 Russian defense contractors, and is expected to yield a series of lucrative deals between Russian and foreign, mostly European, firms.

Russia will also demonstrate the latest highly maneuverable air superiority fighter MiG-29M OVT (Fulcrum F), Russia's state arms exporter Rosoboronexport said. The single-seat fighter, which is also marketed for export as the MiG-35, is powered by RD-33 OVT thrust vectoring control engines enhancing its performance in close air-to-air engagements.

A Yak-130 single-seat aircraft will also be on display at the show. It can be used as a light strike aircraft or as a trainer for fourth and fifth generation fighters. Russia will also represent a new MI 28 N Night Hunter attack helicopter, Rosoboronexport said.

Russia's respected business daily Vedomosti said Friday Russian companies were set to close major deals at Le Bourget.

Sibir Airlines, the Russia's second-largest air carrier after Aeroflot, plans to sign a $1.2 billion contract for the purchase of 20 Airbus A-320 planes and to receive an option for another 10 aircraft, the paper said. But Sibir Airlines declined to comment.

Aeroflot Director General Valery Okulov, who will remain at his post until 2010, recently said his company could sign a contract for the delivery of 22 A-350 XWB airliners, worth over $3.5 billion, at the MAKS-2007 air show to be held August 21-26 near Moscow.

Okulov's deputy, Lev Koshlyakov, said Aeroflot and Rolls Royce would sign a memorandum of understanding on 20 engines for A-330 planes at Le Bourget.

The A-330s and the engines, worth $2-4 million each, will be acquired for a period of eight to 12 years from the Dutch leasing company AercapAC.

Aeroflot and the Russian leasing company Ilyushin Finance could sign a contract on six Il-96-400 cargo planes worth $70 million each, a spokesperson for Ilyushin Finance told the paper.

The spokesperson also said Atlant-Soyuz, an airline of the Moscow government, could also buy the same number of cargo jets.

Under another contract, Italy's Alenia Aeronautica is expected to buy a 25% plus one share stake in Russian plane manufacturer Sukhoi Civil Aircraft. Both companies, which have agreed on the terms of the deal, will announce the purchase at Le Bourget, a source close to Sukhoi Civil Aircraft told Vedomosti.

He said Sukhoi Civil Aircraft, a subsidiary of the United Aircraft Corporation, which consolidates civil and military aviation production assets, had been estimated at over $1 billion.

But the United Aircraft Corporation said it would secure all the major deals for MAKS-2007.

The show will be open exclusively to industry professionals for the first four days and then to the general public.

The previous air show in 2005 featured a record number of 500,000 visitors, including 223,000 professionals, reports

Held every two years, the last Le Bourget was a showpiece for the long-awaited unveiling of the Airbus A380, the double-decker monster that the company predicts will transform air travel. Two years before that Airbus sales topped Boeing's for the first time in the European company's 30-year history.

So, at the last Le Bourget, it seemed Airbus could do not wrong. But the some 500,000 visitors (and 2,000 exhibitors) this year will not see a repeat of those heady days of optimism. Since then, higher A380 research costs, delivery delays, and the weak dollar - Airbus sells in dollars but most of its costs are in euros - have turned the superjumbo into a nightmare. Airbus lost €572m last year, and is expected to remain in the red for 2007. EADS, Airbus's parent, may be forced to reveal more details of its Power 8 restructuring programme that involves plant closures and 10,000 job cuts. EADS won't want to focus on negatives at such a high-profile event, but investors, analysts and the media want answers.

Likewise, people will be looking for news on the new Airbus A350 extra wide body (XWB), competitor to Boeing's 787 Dreamliner. The mid-range A350 is about five years behind the 787, and Airbus needs to get more orders under its belt if the model is to meet a promised 2013 in-service date.

Rumour has it that India's Kingfisher Airlines is interested in placing a multi-billion-dollar order. And Qatar Airways is this week expected to formally sign an order that was preliminarily agreed last month for 80 of the A350s. Qantas, Saudi Arabian Airlines and Singapore Airlines may also provide Airbus with some good news on A350 orders.

What concerns investors is Airbus seems to be offering heavy discounts. Such reductions are never disclosed publicly, but last month Aer Lingus made a point of telling its investors it had negotiated very substantial discounts on an A350 order, reports.

Source: agencies

Prepared by Alexander Timoshik