Airbus Gets Go-Ahead to Develop New Airliner

Airbus got the go-ahead Friday from its parent company to start taking orders for the A350, a mid-size passenger jet that will compete with Boeing Co.’s 7E7.

The European aircraft manufacturer won support for its plan to spend close to 4 billion euros ($5.3 billion) to develop the A350, which it said would carry more passengers and have a greater range than the 7E7, which is being trumpeted by Boeing for its fuel-efficiency.

The board of European Aeronautic Defense and Space Co., which owns 80% of Airbus, agreed to launch the A350 at a meeting Friday in Amsterdam. Britain’s BAE Systems, owner of the remaining 20% of Toulouse, France-based Airbus, also gave its approval.

The A350 could spell more bad news for Boeing’s commercial aircraft unit, which is on course to deliver fewer planes than its European rival for the second straight year.

The competition for customers for the new jetliner models is likely to intensify tensions not only between Boeing and Airbus, but also between Washington and the European Union, which are headed toward a showdown before the World Trade Organization over subsidies to the two aircraft makers.

John Leahy, Airbus’ chief commercial officer, said it was “no accident” that with less than three weeks before the end of the year, Boeing had signed only 52 of the 200 firm orders it pledged to win by then for its twin-engine 7E7 Dreamliner.

“There must be a reason,” Leahy said, “and the reason is the A350.”

Randy Baseler, Chicago-based Boeing’s vice president for marketing, said some clients had discussed the A350 with Airbus but that other factors were delaying the placing of 7E7 orders.

Baseler insisted that Boeing could still reach its 200-order goal.

He also dismissed the A350 as a “15-year-old derivative airplane with a new engine on it.”

Shares of EADS closed 0.5% higher in Paris trading.

Boeing shares fell 36 cents to $52.42 on the New York Stock Exchange.