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Boeing, Airbus battle for orders

From CNN's Jim Boulden

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The Farnborough air show outside London draws industry insiders from around the world. CNN's Jim Boulden reports. (July 19)
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FARNBOROUGH, England (CNN) -- Industry events don't get much bigger than the Farnborough air show.

Billions of dollars in potential commercial and defense deals can be struck at the biennial air show, which runs Monday to Sunday in Farnborough, southern England.

As in previous shows, aerospace giants Boeing and Airbus will be battling for the spotlight and attempting to bag big orders from international carriers at a time when the industry is experiencing its worst slump in decades.

For U.S.-based Boeing, its main attention getter will be the new mid-sized 7E7 aircraft, dubbed the Dreamliner, which is due to enter service in 2008.

Airbus, owned by the French group EADS, is touting its new super-jumbo A-380. The huge 555-seat aircraft is to start flying in 2006.

Which airline will buy which aircraft remains to be seen.

Many aircraft makers usually save announcements of new orders for air shows, such as Farnborough. And this year is not expected to be an exception.

"There has been just enough activity on the big, new shiny aircraft front ... to keep both manufacturers feeling and talking very buoyantly about the future," Chris Avery, an analyst at J.P. Morgan, told CNN.

Japan's All Nippon Airways wants 50 of Boeing's 7E7 and another 24 airlines are considering ordering the aircraft, Reuters reported, although just four have made their intentions public.

Airbus is believed to be close to A-380 deals with Turkish Airlines, Abu Dhabi-based Etihad Airways and Thai Airways, the news agency said.

New orders announcement at Farnborough will come on top of figures showing a 20 percent jump in passenger traffic so far this year.

Still, with more low-cost carriers being launched in the United States, Europe and Asia, the battle for passengers to fill a growing number of seats is intensifying.

Given the growing competition -- and high fuel prices -- airlines that have been struggling recently now face an even tougher uphill battle back to profitability.

Given the uncertainty of commercial deals, many manufacturers count on military contracts to prop up their profits.

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All Nippon Airways is among the carriers to order Boeing's 7E7 Dreamliner jet.

Indeed, much of what is on offer at Farnborough is purchased through defense budgets -- which are rising in the United States and Britain.

"There has been increasing realization on both sides of the Atlantic that a lot of the (military) equipment they have is becoming obsolete," David Mulholland, of Jane's Defence Weekly, told CNN.

"And there were still security threats that warranted spending. And what we are seeing with the Bush administration is a huge increase in defense spending."


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