Still more Airbus woes (3)

Airbus in a Quandary in A350 Revamp Aim Is to Mollify Customers,
But Plan Spurs Uncertainty Over Name, Engine Maker
By DANIEL MICHAELS
June 13, 2006;*Page*A2

Airbus faces unresolved issues as it markets a new jetliner to replace
its proposed A350 model, its latest effort to quell criticism about the
plane and better compete with U.S. rival Boeing Co.
Airbus officials this month began informally giving airline executives
details of the redesigned long-range, two-aisle jet, which seats nine
passengers in each economy-class row, instead of eight in the original
A350 version, people familiar with the matter said. Initial customer
reaction has been positive, and Airbus could get authority this month
from its board to formally sell the plane, these people said.
The European aircraft maker still faces questions about who will produce
the engines and what the two-engine plane will be called. As a result of
the redesign, Airbus may not be able to deliver the first of the new
planes until at least 2012, two years later than originally planned and
four years after Boeing's competing 787 model is scheduled for delivery.
(See related article1.)
BACK TO THE DRAWING BOARD
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See more information on Airbus's proposed A350 jet.
The redesign of the A350 jet comes at a difficult time for Airbus. The
plane maker is scrambling to overcome production and regulatory problems
for its two-deck A380, the largest passenger plane ever built, which
Airbus hopes to start delivering late this year. Airbus also faces
dwindling sales of its big A340 model, which has a capacity between
those of the smaller A350 and bigger A380.
Airbus unveiled the A350, originally derived from its A330 model, in
2004 to compete with Boeing's 787 "Dreamliner." Airbus has repeatedly
had to increase the proposed plane's range, size and passenger-comfort
level because Boeing's 787 was selling better. Airbus has 182 orders and
commitments for the plane from 14 customers, compared with 403 from 29
customers for the 787, which Boeing started offering in 2003.
Airbus Chairman Noël Forgeard recently confirmed speculation that the
company aimed to build an all-new jetliner. Airbus' parents -- European
Aeronautic Defence & Space Co., which owns 80% of Airbus, and Britain's
BAE Systems PLC, which owns 20% -- could this month approve the new
program for the A350, which industry officials estimate could roughly
double its investment, to around $10 billion.
According to people familiar with what Airbus is proposing, the plan is
for a family of three jetliners that would be bigger than the initial
A350 and have greater range. One of the planes will fly further than the
787 and than the A350's promised range of 8,800 nautical miles. Airbus
hopes the new family of jets will compete with both the 787 and Boeing's
larger 777 model. Airbus wants to officially unveil its new A350 model
at or before the Farnborough Air Show outside London in mid-July.
Singapore Airlines Chief Executive Chew Choon Seng, one of the two vocal
critics of the original A350, said last week that based on what he knew
of Airbus's revised plans, the new jetliner "would make them much more
competitive against the 787." Singapore Airlines is looking to order
several-dozen planes in the size range.
General Electric Co. and Rolls-Royce PLC were developing engines for the
original version, but GE is hesitating about offering engines for the
new model, according to people close to the issue. GE has heavy
investment commitments on other Airbus and Boeing models, and risks
cannibalizing its own sales at Boeing, these people said. Rolls-Royce is
in talks with Airbus on the plane, these people added. It remains
unclear if the world's other maker of big jet engines, United
Technologies Corp.'s Pratt & Whitney unit, is in the running.
What to name the new plane also is under debate. Some officials at the
company argue that an all-new plane deserves a fresh moniker. Others
worry about the embarrassment of ditching a widely marketed trademark.
Some airline and other industry officials have started referring to the
new design as the A370. Airbus is also considering linking the model to
the much-hyped A380 by calling it the A280, A480, or even A880, said a
person familiar with the debate, because the number eight is considered
auspicious in parts of Asia, such as China. Another person close to the
issue said "A350" stands more than a 50% chance of sticking. Airbus
spokeswoman Barbara Kracht said the company won't discuss the issue at
this point.
--J. Lynn Lunsford contributed to this article.
Write to Daniel Michaels at