Airbus rift said to put wrench in A350 plans

A dispute between the French government and the main shareholders of Airbus parent EADS Co. is holding up a key decision on the A350 jetliner program, two people close to major EADS shareholders said Friday.

EADS’ board called off Friday a meeting at which discussions had been scheduled on the A350’s launch -- badly needed to compete with rival Boeing Co. -- because the French government was unable to agree with stakeholders Lagardere and DaimlerChrysler over how to finance the program, the two people said.

The people, who spoke on condition of anonymity because the discussions were confidential, said another board meeting had been scheduled for next week. According to some press reports, Lagardere and DaimlerChrysler have resisted moves by the French government to increase its 15% stake in EADS.

Neither EADS nor DaimlerChrysler would comment. Attempts to reach spokespeople for Lagardere and French Finance Minister Thierry Breton were unsuccessful.

The dispute comes as DaimlerChrysler tries to cut its 22.5% stake in EADS. Paris-based Lagardere pared its holding earlier this year and now owns 7.5% of the European defense group.

EADS said last month that deliveries of its super-jumbo A380 would be delayed an additional year. The overall two-year setback, blamed on wiring problems, angered airlines and wiped 4.8 billion euros ($6.3 billion) off forecast profit. The squeeze, compounded by a weak dollar, comes as Airbus is seeking to raise 8 billion euros ($10.5 billion) to develop the A350.

Airbus has steadily lost business to Boeing in the market for mid-size planes and needs a new plane to compete with its rival’s fuel-efficient 787 Dreamliner, which is scheduled to enter service in 2008. Top Airbus salesman John Leahy said Airbus’ market share by value had slipped to about 36% this year, from 45% in 2005 and 54% in 2006.

Initially planned as an improved version of its existing A330, the A350 design has been repeatedly revamped to meet airlines’ expectations.

Before Friday’s meeting was postponed, Airbus and EADS had said the board would decide on the A350 launch by the end of November.