Berlin air show to give glimpse of delayed airport

BERLIN Mon Sep 10, 2012 7:54am EDT

1 of 2. A general overview shows the main terminal of the future Berlin Brandenburg international airport (BER), also known as Willy Brandt airport in Schoenefeld September 4, 2012.

Credit: Reuters/Tobias Schwarz

BERLIN (Reuters) - The ILA Berlin Air Show this week will bring some long-awaited action to the city's new airport, a source of embarrassment to Germany's capital following multiple delays to its opening.

A spotless new runway, so far unused for commercial flights, will finally feel the burn of rubber as flying displays show off aircraft including the Eurofighter jet and Eurocopter's new high-speed helicopter X3.

Over 1,200 exhibitors are expected to attend the world's oldest air and space trade fair, half of them from outside Germany. Attendees include European planemaker Airbus and U.S. rival Boeing (BA.N), whose civil aircraft arm is returning to Berlin's air show after a hiatus of more than 10 years.

Less touted as a deal-making event than the Farnborough or Paris industry showcases, ILA will nonetheless draw a prominent crowd with money to spend.

AirAsia (AIRA.KL), Asia's largest low-cost carrier, is putting the finishing touches to a deal to buy up to 100 Airbus jets, sources close to the matter said on Friday, although they added an announcement was unlikely in Berlin.

But as much as the deals, the chatter around the chalets is likely to centre on fears the faltering global economy is finally catching up with the civil aircraft industry.

Airbus and Boeing, which battle for the bulk of a jet market estimated at $100 billion a year, have long trumpeted their resilience, arguing airlines need to modernise their fleets to cope with high fuel costs and that growth in Asia and the Middle East can offset weakness in the United States and Europe.

Last week, Airbus raised its 20-year forecast for deliveries, citing strong Asia-Pacific markets.

But the Farnborough Air Show in July, the quietest for years, suggested the good times might be coming to an end as the euro zone debt crisis drags on, banks become wary of financing long-term, costly aircraft orders and Chinese growth slows.

That has turned the spotlight on Airbus and Boeing's ability to deliver on a record backlog of orders, and on whether any of these might be delayed or cancelled.

"If you look at ... some of the names of ordering companies, you have to wonder whether they have the financing to pay for all these planes. It just doesn't seem credible, and I believe that some of that order backlog will most certainly drop out," KPMG aerospace expert James Stamp told Reuters.

Tom Enders, the chief executive of Airbus's parent company EADS EAD.PA, told journalists on Monday that airlines in Europe were under "immense pressure," though he remained upbeat about demand from Asia and the Middle East.

Boeing and Airbus have orders for over 8,000 aircraft, enough to keep them busy for the next six years even without any new deals, and analysts predict the industry must increase annual output volume by 45 percent by 2015 - a huge challenge.

PAST AND FUTURE

The newly-built ILA site is adjacent to Berlin-Brandenburg Airport, which was originally due to open in 2011 but the opening has been delayed three times already.

The scheduled opening for June 3 was scrapped at short notice earlier this year due to problems with fire safety systems, and officials said on Friday they were further pushing back the opening to October 2013.

More than 20 years since German reunification, the capital is still making do with two small airports, Tegel and Schoenefeld, that date back to the Cold War era.

"At least we will have the (new) south runway all to ourselves," EADS's Enders said.

About 270 aircraft will be on display at ILA, from an historic Messerschmitt Bf 109 to the world's two largest passenger aircraft, Airbus's A380 and Boeing's 747-8.

All eyes will also be on whether EADS's A400M military transport plane will take part in the flying displays after engine problems forced it to sit out the popular stunts at Farnborough in July for a second year running.

Emirates, which has been lobbying unsuccessfully since 2004 for landing rights in Berlin, said on Sunday it will bring one of its 23 A380 mammoth jets to the show, which runs September 11-16.

The airline said the delays and cost overruns at the new airport only strengthen its case for being allowed to fly to Berlin. "The new airport needs to increase revenue to balance some unplanned costs," Emirates passenger sales boss Thierry Antinori told Reuters. "And we want to spend money." (Editing by Mark Potter)