Misery reigned at this year's Paris Airshow, with industry figures sporting faces longer than an A380's wingspan. But Middle East carriers are leading the charge towards a brighter future, unveiling a string of multibillion-dollar deals.

orrential rain hammers down relentlessly from the gloomy, unforgiving skies over Paris, sending people scurrying for cover at Le Bourget. And the atmosphere is as miserable as the weather at this year's Paris Air Show, with aviation's biggest figures, clad in immaculate designer suits and stylish shoes, sloping sullenly through the puddles between the glitzy chalets and huge exhibition halls.

The sombre mood is hardly surprising given the chronic state that most airlines are in. With the financial crisis hitting passenger demand, carriers across the globe are desperately trying to fill seats on their respective routes; an aim made all the more difficult for A330 operators in the wake of the Air France disaster on May 31.

The aircraft, carrying some 228 passengers from Brazil to France, crashed into the Atlantic Ocean for reasons unknown, with no survivors from its 228 passengers. Among the potential causes, experts and analysts initially suggested thunderstorms as a possible catalyst. In the weeks since, a technical fault with the plane's air speed sensors has been proposed.

Throw last year's crippling oil price into the mix, which peaked at $147 a barrel but is now hovering around $70, and you have a sector that is struggling to stay airborne, a trend borne out by Boeing and Airbus' poor order books.

The US and European manufacturers openly admitted that their objective at this year's air show in Paris was damage limitation. The companies have suffered setbacks in 2009 after receiving cancellations from newly cash conscious carriers.

Other airlines, meanwhile, have or are considering delaying aircraft deliveries in a bid to better weather the economic storm.

By May 31, Boeing had secured orders for 73 planes and faced 66 cancellations, giving it seven net orders. Airbus just pipped its US rival during the same period, with 32 orders and 21 cancellations, giving it a net inflow of bookings for 11 planes.

In 2008, Airbus had 777 net orders to Boeing's 662, a far cry from this year's expected final tallies based on the dismal first half figures. In response to the declining demand, both firms have cut production and may trim further if market conditions continue to decline.

With airlines reneging on aircraft orders or delaying deliveries, it is no surprise to see the International Air Transport Association (IATA) predicting greater financial deficits for the industry.

Indeed, IATA's figures suggest global airlines will register a $4.7bn loss in 2009 as passenger demand continues to wane. The Middle East is no exception, with a $1.5bn shortfall expected this year, a drastic increase from the $900m projection that IATA originally issued in early 2009.

But despite IATA's downbeat outlook, spirits remain high among the Middle East airlines represented in Paris. While carriers from other regions were content to simply turn up and parade themselves at the world's biggest air show, their Gulf counterparts fired on all cylinders with a series of multibillion-dollar deals.

Etihad Airways stole the headlines after announcing a $14bn engine agreement with partners including Rolls Royce and GE Aviation.

The carrier has 100 firm orders, and options and purchase rights for a further 105 engines, with deliveries expected between 2011 and 2020. This deal follows last year's aircraft announcement, which saw Etihad agreeing to buy 100 aircraft and take options and purchase rights for a further 105.

When announcing the deal on June 17, Etihad Airways chief executive officer James Hogan talked about the airline's bold ambitions during testing times. "Despite the tough economic challenges currently facing the aviation industry, Etihad Airways continues to roll out its long-term expansion plans in a measured, considered and controlled manner," he said.

"The new aircraft, and engines that will power them, are scheduled for delivery between 2011 and 2020 which demonstrates the confidence we have in our plans for sustainable future growth. These plans will establish Etihad Airways as the world's leading airline and our hub of Abu Dhabi as a leading global centre of commerce and tourism."

Hogan continued: "We are operating in a very challenging environment at the moment but we have absolute confidence in our future, intrinsically linked to the exciting and ongoing development of Abu Dhabi, as well our engine and aircraft manufacturing partners."

While the Abu Dhabi carrier takes credit for sealing the event's biggest deal, other Middle East carriers and aviation companies were equally keen to publicise their own transactions. Perhaps to steal a march on its UAE rival, Qatar Airways revealed the previous day it had signed a "major" aircraft order with Airbus.

Qatar Airways chief executive officer Akbar Al Baker told journalists that the Doha carrier had ordered 24 Airbus A320s and $700m worth of engines to power them.

He also hinted the new planes could be used to launch a new low-cost carrier designed to compete with budget airlines that are stealing market share from Qatar's flagship operator.

Whether Al Baker follows through and establishes a low-cost airline remains to be seen, but he insists the order is further evidence of Qatar Airways' firm footing in the Middle East aviation industry.

In typically bullish fashion, he added: "Qatar Airways is determined to grow with the world's best aircraft at the heart of a modern and fuel-efficient fleet, and this A320 family order will ensure that our narrow-body fleet is the youngest and best equipped in the region.

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"With a larger mix of narrow-body and wide-body aircraft in our fleet, this [order] gives us even greater flexibility in our commercial operations, allowing us to deploy aircraft on specific routes depending on market conditions."

Al Baker is also keen to stress that Qatar Airways, like other Middle Eastern carriers, refuses to scale back amid the current economic downturn. "Our latest order demonstrates Qatar Airways' strong commitment towards continuing its aggressive global expansion strategy.

"Despite the current shifting economic climate hanging over many economies around the world, Qatar Airways has foresight with long-term objectives and planning, which means continuing our growth strategy with vigour."

Aside from ordering new planes and engines, Qatar Airways also unveiled its new corporate jet subsidiary, Qatar Executive, at the air show. The service will be operated using a Bombardier 300, and two new Bombardier Challenger 605s to be delivered later this month.

The airline says the planes are capable of flying 4,000 nautical miles non-stop to destinations across Europe, Africa and Asia from its hub at Doha International Airport. And while some analysts might question the timing of such a launch, the airline insists demand for business jet services in the Middle East remains high.

Figures from the Centre for Asia Pacific Aviation support the airline's positive outlook for executive travel, with the corporate market in this region growing 13 percent year-on-year since 2000.

The market intelligence agency notes that the number of corporate jets operating in this region has almost doubled during the same period from 200 to 450 last year. Finally, it says, the industry is worth between $500m and $700m annually, suggesting executives are still willing to spend big on business travel.

In total, Qatar Airways has $40bn worth of planes on order, is pumping $15bn into a new international airport in Doha, and is upgrading its existing hub, not bad considering the industry globally is held to be in dire straits.

And not to be outdone by its Middle East rivals, Gulf Air ordered $1.5bn worth of aircraft engines from Rolls Royce. The Trent 700EP engines were bought to power 20 Airbus A330s, with deliveries expected to begin in 2012.

"As Gulf Air progresses with its ambitious re-fleeting and product enhancement strategy, we need an engine to power our future A330s," said Gulf Air's deputy CEO Ismail Karimi.

"After exploring a number of options, we have selected the Trent 700 as the one best suited to meet our future needs. The Rolls-Royce engine offers the best deal for Gulf Air technically, operationally, commercially and environmentally."

While Middle East airlines soared during the show, aviation operations at ground level were also busy striking deals. The Abu Dhabi Airports Co (ADAC) unveiled its plans to develop the UAE's aerospace industry by linking up with German operator BavAIRia.

This twin cluster agreement will see both the manufacturing companies exploring mutually beneficial business opportunities in the aerospace industry.

ADAC will establish a cluster in Al Ain, located near the city's airport, which will house several manufacturing, engineering and maintenance companies operating in the aerospace sector.

Announcing the deal, ADAC senior project adviser Zeyad Al Majed, senior project advisor told Arabian Business that it would take between three to five years to develop an aerospace industry in the UAE that is capable of drawing in nationals.

"We will provide the industry itself and then the Emiratis will be attracted," he said. "At the moment, you don't really have much of an aerospace industry.

"There is a lot of experience in aircraft maintenance and quite big numbers that work in maintenance, repair, and overhaul [in the UAE], but you need to diversify and bring in more of the aerospace such as engine composites and aero engine parts; then you create a platform to employ UAE nationals and get them qualified in a programme."

Despite admitting it may take five years to establish an aerospace industry capable of luring Emiratis from public sector jobs, Zeyad is confident the objective will be met.

And who can blame him? Outstripping the competition over the length of the four-day show, Gulf carriers have provided a rare ray of sunshine amid the Paris gloom.

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