Earsplitting air displays are the main draw for the thousands of plane enthusiasts attending the Paris Air Show, but the most important activity takes place on the ground.

As fighter jets demonstrate their agility overhead, a real-life dogfight between the world's biggest civilian aircraft makers, Airbus of Europe and US-based Boeing, will unfold below in the corporate hospitality stands.

The weeklong bi-annual event, which begins on June 18, is one of the biggest aerospace events in the world and one of the most important dates in the industry's calendar.

Boeing and Airbus announced new orders worth US$48 billion at the last Paris show in 2005 and will be looking to clinch more business this time.

Two years ago, Airbus led Boeing in the race for new orders, but the European group has since fallen behind and is battling to solve major production and operational problems.

"Two years ago Airbus was at the top, we were the best," said Airbus chief executive Louis Gallois. "We are no longer in the same situation."

So far this year Airbus has announced about half the number of orders as Boeing. At the end of last month, Airbus had reported 201 new orders this year, while its US rival had 429 as of the beginning of June.

Furthermore, Airbus spectacularly slipped into the red last year, reporting a loss after a profit of EUR2.3 billion in 2005, and the group has since launched a radical restructuring plan.

The group's main problem is its A380 jumperjumbo project that has fallen about two years behind schedule and has resulted in unforeseen costs of hundreds of millions of euros.

A weaker dollar has made Airbus products less competitive and its development of a midsized jet, the A350, has also hit problems.

Airbus will reach a goal of cutting costs by EUR300 million this year under the so-called Power8 plan after its first loss last year because of A380 delays, Gallois said.

Airbus plans to slash costs by 2.1 billion euros annually by 2010, eliminating 10,000 jobs and selling or finding partners for six factories. Meanwhile, Boeing has gone from strength-to- strength, partly due to the phenomenal popularity of its new ultramodern midsized plane, the 787, which will enter service next year, five years before the Airbus A350.

The US group has received nearly 600 orders for the 787 and says it has no spare production capacity until 2013.

"Our backlog is at record levels, our financial performance is solid, and we are intensely focused on delivering on our promises to customers," said Tom Downey, Boeing's senior vice president for communication.

The group said recently that it expected airlines to take delivery of 28,600 new planes in the next 20 years, illustrating the optimism in the industry about future demand.

In Paris, Airbus is hoping to kickstart orders for the A350 and is promising 200 new orders before the end of the year. "It [2007] will be the year of orders for the A350," according to Airbus' sales director, John Leahy.

Qatar Airways is expected to convert its declared interest in buying 80 A350s into a firm order during the air show. And Indian group Kingfisher Airlines, which ordered five A380s and five A350s at the Paris show in 2005, has said it will place another order for more planes, which may include both models.

Industry observers will also be watching for any news on either company's plans for a new generation of single-aisled planes, which are used on short-haul routes.

The Paris show is expected to draw about 400,000 people.

Organizers decided to pay homage to the helicopter this year, which is celebrating its 100th anniversary.

The show will give the paying public the chance to get close to the A380, one of among 140 aircraft on display.