Competition was intense, “but it has always been like that”, he told Reuters during the show.

With foreign forces due to bow out of combat in Afghanistan by the end of 2014, a stream of lucrative contracts for Western defence firms is set to dry up, dealing another setback to the companies, although one they insist they have planned for.

BAE Systems said last month it would consult unions over 620 potential job losses and the closure of an armoured vehicle factory in Britain.

EURO ZONE CRISIS

The financial crisis that has lashed Europe since 2007 is having a severe impact on defence spending there and some industry players fear more cuts could be on the way.

The International Institute for Strategic Studies, a British think-tank, said in its Military Balance review this year that defence spending in European NATO states fell by an average of 7.4 percent per country in real terms between 2008 and 2010, with double-digit drops in countries such as France, Italy and Spain.

Britain is cutting 8 percent in real terms over four years from its 34 billion pound ($52.7 billion) defence budget.

In the United States, the Pentagon is under orders to cut spending by $487 billion over the next decade as the government tries to rein in its trillion-dollar deficit.

By contrast, emerging powers such as China and India -- both of which had companies exhibiting at the Paris show -- are increasing spending on arms.