Cocktails and kerosene will take a back seat at next week's Farnborough Airshow as arms firms strive to fit in with the growing mood of austerity and Boeing shows off its new fuel-saving 787 Dreamliner.
Many defense companies have cut back on their visible presence at the aerospace gathering and organizers have been told to cut back on anything that might look like frills and perks to Pentagon planners and others weighing big defense cuts.
That means fewer orders of champagne but plenty to talk about inside the invitation-only chalets before the biennial July 19-25 business jamboree near London opens to the public next Friday.
Everyone is cutting back on hospitality this year, especially in the government areas, a catering supervisor said as workers put the finishing touches to a temporary air base crammed with smart weaponry and sleek, new passenger jets.
European aerospace companies face a raft of uncertainties over spending reviews affecting projects ranging from aircraft carriers and the combat jets they carry to unmanned spy drones.
Defense giants in the United States have seen relatively stable spending, but are bracing for steeper cuts as they battle to maintain existing projects like the Lockheed Martin F-35 Joint Strike Fighter, history's costliest arms deal, on budget and schedule.
There is only one thing on everyone's lips and it's cuts, said Howard Wheeldon, senior strategist at London brokerage BGC Partners, who has attended every Farnborough since 1968.
Overshadowing the airshow will be high-profile battles between Boeing and EADS subsidiary Airbus over a $50 billion contest to provide aerial tankers to the U.S. Air Force and the world's largest trade dispute over aircraft subsidies.
The two companies and their engine makers are also involved in a cat-and-mouse game over multi-billion-dollar decisions on possible upgrades for their popular single-aisle jetliners, but expectations of a big European announcement have faded.
As arms firms scrape the bottom of government coffers for funding, analysts say acquisitions could heat up in coming months, especially for second-tier defense and civil companies.
Damien Lasou, managing director leading Accenture's Aerospace and Defense Industry Group, said he expected a strong shift into services by many defense and aerospace companies, especially given pressures on defense budgets.
Leasing the use of weapons systems, rather than buying them outright, could reduce costs for governments, while providing companies a steady stream of revenue.
POSSIBLE 787 DELAY
On the commercial side of the show, all eyes will be on Boeing's carbon-composite Dreamliner, taking a break from flight testing to make its first public appearance outside the U.S. following production delays of over two years.
Boeing suffered a setback on the eve of the show when it announced first delivery of the mid-sized lightweight airliner, designed to consume less fuel than traditional metal aircraft, could be pushed back again into 2011 from the fourth quarter.
The switch to composite materials on planes like the 787 and rival Airbus A350, due in mid-decade, could be another cue for consolidation along an increasingly specialized supply chain.
(Valuation) multiples are low and there are candidates that are technologically very interesting, especially those that have very large investments coming up, for instance for a switch to composite materials, said Stefan Ohl, managing director at AlixPartners in Munich.
You used to say that the strong will eat the weak. Now you could say that the liquid will eat the illiquid. That means those that have a full war chest.
Analysts expect a more positive tone on plane orders as air traffic demand picks up, especially after a shock repeat order for 32 Airbus A380 superjumbos from Dubai's Emirates last month.
Emirates could place an order for Boeing 777s at the show but demand remains modest compared to earlier this decade.
Aviation analysts will be watching for further orders for the Bombardier C-Series 110-130 passenger jet, designed to eat into the bottom end of the Airbus-Boeing product range, as well as fresh moves from the new players China and Russia.
(Additional reporting by Maria Sheahan; Editing by Sharon Lindores)