Mystery cancelled air show deal sets Dubai abuzz

By Tim Hepher and Nadia Saleem

DUBAI (Reuters) - The Dubai Airshow ended in a fog of speculation on Thursday when UAE organisers abandoned plans to announce a multi-billion-dollar deal that could have reversed a slump in orders at the Middle East's largest aviation event.

A senior UAE official said the deal would have added 10-15 percent to total deals which he estimated at $39.8 billion, but denied it involved a keenly awaited French fighter purchase.

He was speaking on the last day of the Nov. 8-12 event, a day after the UAE's air force chief told Reuters that talks to buy the French Rafale were in the "final stages".

Word of the hurriedly arranged news conference swept through the exhibition, sending Western defence executives and government officials scurrying to join a depleted press corps to hear what two of them predicted would be a Rafale order.

Major General Abdullah al-Hashimi, executive director of strategic analysis at the UAE defence ministry, told the news conference that the deal he had hoped to announce could not be finalised but was not a combat jet deal.

"It's too sad that we couldn't announce it. The deal was looking good," al-Hashimi said.

"If it was the UAE armed forces, it would be announced at the Dubai Airshow, but it's not," he added.

Pressed on why the news conference was being hosted by the armed forces if the deal did not concern them, he said, "We are a committee of the Dubai airshow. That's the reason I'm sitting here, that's the reason I'm announcing this and that's the reason I'm thanking you for being here."

Abu Dhabi's negotiations to buy 60 fighter jets have dragged on for years and have a history of producing surprise announcements coinciding with the show, held every two years.

The theatrical end to an otherwise quiet event - subdued by low oil prices and concerns over the cost of Middle East conflicts - highlighted the stakes involved for France's competitors as they try to dampen a surge in Rafale exports.

Military analyst Francis Tusa however said the $4-6 billion value implied by al-Hashimi's remarks was too low to involve 60 of the planes, based on prices paid by Egypt and Qatar.

"If Rafale were in the bag they would have signed it on day one; they never leave the big announcements until the end."

A fresh Rafale order would be a setback for the four-nation Eurofighter programme and Lockheed Martin, which had offered upgrades to existing F-16s.

Rafale export hopes rose as Britain's BAE Systems said it was cutting Eurofighter production.

(Additional reporting by Andrea Shalal, editing by William Maclean and David Evans)