Boeing Likely to Get a Competitor to Its Planned 7E7 Jetliner

A top Airbus executive said Tuesday that the European company expected to get the green light next week to develop a rival to Boeing Co.’s forthcoming 7E7 passenger jet.

Setting up what could be another bitter showdown between the two aerospace behemoths, Airbus Chief Executive Noel Forgeard said at company headquarters in Toulouse, France, that he was “reasonably optimistic” that the company’s board of directors would approve the launch of the new jetliner.

The new plane, to be called the A350, would be similar in size and range to Boeing’s 7E7 Dreamliner, a twin-engine, 250-passenger plane Boeing hopes will restore its once-dominant position in commercial aviation.

For the first time, Airbus in 2003 delivered more passenger planes than Chicago-based Boeing. And analysts expect Airbus -- 80% owned by European Aeronautic Defense & Space Co. -- to continue to have a slight edge in market share for at least several years.

It was a year ago that Boeing announced it would develop the mid-size 7E7, the company’s first new jetliner in nearly a decade.

Boeing said the 7E7 would be 20% less expensive to operate than the aircraft it would replace. The plane, which will be made of extensive amounts of composite materials, is expected to fly in 2008.

But analysts said the prospect of a rival Airbus plane already may have affected Boeing’s 7E7 sales.

Boeing has said it expects to have 200 orders by year’s end but so far has only 52, including a 50-plane launch order from All Nippon Airways. Boeing insisted it was still on track to hit that target.

Some airlines have been reluctant to complete their contracts, partly because they are using the prospect of a rival Airbus plane to wring more cost reductions from Boeing on the 7E7, analysts said.

“They want to see more of what Airbus has to offer,” said Paul Nisbet, an analyst for JSA Research Inc. What Airbus is offering “is rapidly changing. There seems to be a change of heart ... toward a new airplane.”

Boeing believes there will be great demand for versions of the 7E7 because it will have a range of up to 9,800 miles, allowing airlines to offer longer nonstop routes from more airports.

Initially, Airbus planned to counter Boeing by simply building a derivative of its existing twin-engine, 250-passenger jet, the A330. Airbus contended that with increased airport congestion, airlines would prefer to operate the larger A380, a double-deck, 550-passenger, super-jumbo jet that will enter service in 2006.

But Airbus executives recently said the company expected to spend nearly $5 billion to develop the A350, a far more ambitious project than simply developing an A330 derivative.

By contrast, Boeing expects to spend about $6 billion in developing the 7E7.

Airbus “is looking at the market segment and realizing that the segment could be worth about a quarter of a trillion dollars,” Nisbet said. “They just don’t want to concede that to Boeing.”

Airbus executives said their plans for the A350 would include a new wing design, the use of more composite materials and the same Rolls-Royce and General Electric engines that are being developed for the 7E7.

Financing the new Airbus plane could further intensify a thorny trade fight.

Forgeard said Airbus would apply for loans from European governments to help cover the plane’s design costs. Analysts believe this would probably prompt additional protests from U.S. trade negotiators.

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Times wire services were used in compiling this report.