Arms race dominates Dubai air show

By Tim Hepher

DUBAI (Reuters) - Middle East tension is driving demand for military hardware at the Dubai Air Show which opens on Sunday, but recession means fewer orders for civilian jets.

Bitter rivals Airbus and Boeing will still woo carriers at the top Middle East aviation event, but most airlines' cheque books are empty and the fiercest marketing battles will be waged by jet fighters performing above the Gulf.

"With more threats and continued tensions you will have continued demand for new systems and new capabilities and that is why we have seen ongoing interest in upgrading and renewing fighter fleets," Riad Kahwaji, chief executive of the Institute for Near East and Gulf Military Analysis, told Reuters.

"So long as tension is there, and the situation with Iran is not solved, and there is the threat of terrorism and so forth, I think there will be an ongoing arms race," he added.

Host nation United Arab Emirates is in talks with France's Dassault Aviation to buy Rafale combat jets which will be on display at the November 15-18 air show. But analysts say the United States has not given up on grabbing away a deal.

Others reported to be looking to expand or renew fighter fleets include Kuwait and Oman, while sources told Reuters in July that Saudi Arabia was looking to expand a recent purchase of Eurofighter Typhoons and is talking to Boeing about F-15s.

In a surprise decision, the United States will show off the world's most advanced fighter, the Lockheed Martin F-22 Raptor at the show, months after axing a display at the world's largest air show in Paris.

The jet is not on sale abroad but its only other major foreign appearance in Britain last year created a buzz and was seen as a possibly deliberate reminder, for buyers of other U.S. hardware and potential enemies alike, of its military reach.