We'll Always Have Paris: Weapons Manufacturers Set Their Sights on New Profits at Le Bourget Paris Air Show


The Paris Air Show kicks off next week at Le Bourget. This is the 100th anniversary of the weeklong flight fest, featuring lots of planes on the tarmac, flying demonstrations and delegations of commercial and military aircraft manufacturers, and plenty of opportunities for contractors, military officials and government representatives to rub shoulders, kick the wheels of planes and play with the controls and make big deals--all while singing "Joyeux anniversaire."

But, all is not satisfaire. Against the back drop of tail-spinning global economy, the airline industry has been hit hard and some are opting to skip the show. Business Week reported earlier this week that Le Bourget regulars Cessna and Gulfstream will not be taxi-ing in this year and that many other companies have scaled down their participation, opting for more modest chalets (display areas) and smaller delegations. In the article, Louis Le Portz, the air show's chief executive, observes "Of course we had a few no-shows in the parts of the industry especially hard-hit by the crisis, like business jets," but with more smaller companies participating, he adds that "we sold out all the available stands and chalets."

To give you a sense of what that means, in Pavilion Hall Three--known as the U.S. International Chalet during the Paris Air Show--space went for $1,290 a square meter (before taxes, fees, electricity, furniture, etc and a mandatory $1,500 registration fee). Kallman Worldwide, a New Jersey-based company serving trade shows all over the world, also sold chalets spaces for $42,000 and $44,000 a piece ($2,000 more for a conference room, rather than a table). Catering, flowers, house-keeping, hostess-ing (with an array of snug and attractive uniforms to choose from) and other services are extra, but a helpful list of preferred providers is offered on the Paris Air Show website.

Far above the static displays, gawkers and buyers alike will be treated to aerial daring-do with four hours of flying displays every day.

One highly anticipated event is the acrobatics of the F-22 Raptor, Lockheed Martin's supersonic fighter plane. The Raptor was originally conceived to penetrate the airspace of the long extinct Soviet Union, to counter large formations of enemy bombers in Cold War scenarios that are today inconceivable. In the U.S., the $65 billion Raptor program is the poster-child for cost overruns, missed deadlines and a military procurement strategy based on keeping assembly lines open and key members of Congress happy rather than military relevance or necessity. Defense Secretary Robert Gates himself acknowledged before the Senate Armed Forces Committee last year that "we are fighting two wars, in Iraq and Afghanistan, and the F-22 has not performed a single mission in either theater."

But, even if the Raptor can't fight wars, it can wow the crowds, so at least someone is benefiting from the $65 billion investment the U.S. taxpayers have sunk into Lockheed Martin. The F-22 will "perform" at Le Bourget, but not touch down in France according to Reuters. The only potential beneficiary of showing off the F-22 is Lockheed Martin itself, which has been trying -- with the help of powerful Hawaii Democratic Senator Daniel Inouye -- to get Congress to lift the ban on exporting the "Raptor" so they can sell it to Japan, among other customers. Robert Gates is opposed to this, but we'll see if he can beat the arms lobby on this one.

Out on the tarmac, hundreds of aircraft will be arrayed. The Pentagon is doing its part to help the U.S. based weapons manufacturers make more sales, deploying ten of its aircraft to Paris. Among the military aircraft on display courtesy of the Department of Defense are Lockheed Martin's massive C130J Hercules (a troop and supply transporter), Northrop Grumman's E2C Hawkeye 2000 surveillance plane, and a whole range of fighters from the F15 Strike Eagle to the F/A 18F Super Hornet.

The Pentagon's participation in these international airshows is controversial. A decade ago, Representative Pete Stark (D-Calif.), introduced legislation to end the use of taxpayer money for the shows after discovering that the displays of U.S. aircraft and personnel at international weapons exhibits like the Paris Air Show cost U.S. taxpayers approximately $35 million a year. His House Resolution 1935 would have prohibited the use of U.S. military equipment and personnel at foreign airshows unless the defense contractor reimburses the U.S. government for the cost of their participation. Seems reasonable, right? The bill got four co-sponsors and went nowhere. As we're looking for places to tighten the belt, it might be time for Stark to revive this effort.

Besides, Lockheed Martin needs no help from the taxpayers. It is doing fine. The company reported sales of $42.7 billion in 2008. The Bethesda, Maryland based company released its first quarter 2009 report in April, with $10.4 billion in net sales, an increase of 4% over the same quarter last year.

Lockheed Martin is not alone. The big weapons manufacturers are reaching new altitudes, even in a floundering global economy. "It's a great time to be in the fighter business" says Bob Gower, the head of Boeing's F-18 fighter plane program. Indeed, as Reuters reported yesterday, Brazil, India, United Arab Emirates are in the market for new fighter planes now. And Japan, Saudi Arabia, South Korea, Qatar (population: 833,285 people) and Kuwait all have plans to buy in the next few years.

Looking to draw these and other prospective buyers, Raytheon, Northrop Grumman and other military contractors are pulling out all the stops for Paris. They have shelled out big time for prominently placed trade "chalets" large enough to host daily press briefings, are sending large delegations to Paris, and have bulked up their online presence for the show as well, with graphic heavy Paris 2009 websites, detailed press packets and injunctions to follow them on twitter and RSS.

As the Stockholm International Peace Research Institute just discovered, the nations of the world collectively devoted $1.46 trillion to their military budgets last year--a 4% increase over 2007, despite the economic crisis. They won't say it out loud, but for the companies that make the fighter planes, bombers and attack helicopters, that is ching-ching news worthy of a another glass of champagne.