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Airbus may hike A350-1000 output in 'mini-jumbo' battle
PARIS (Reuters) - Airbus is looking at increasing planned production for the largest member of its A350 family to power its next important struggle with Boeing for a lucrative corner of the jet market, two people familiar with the matter said.
The plans emerge on the eve of Tuesday's inauguration in Toulouse, southwest France, of an assembly factory for the A350, which is being developed at an estimated cost of $15 billion.
The lightweight carbon-composite aircraft is Airbus's answer to two categories of Boeing long-haul jet: the 787 Dreamliner, which pioneered the large-scale of fuel-saving materials, and the more traditional metallic but still popular 365-seat 777.
The largest variant, the 350-seat A350-1000, will allow Airbus to compete directly with the twin-engined 777 "mini-jumbo". The duel is shaping as the next major aviation battle, with sales of up to 2,000 jets at stake over the next 20 years.
Airbus blames a shortage of delivery slots for slow sales of the A350-1000, which has notched up 88 orders and seen several cancellations since launch, though its U.S. rival claims Airbus was wrong to try to compete in two segments with one plane.
Raising production would free up more slots to be sold.
"Airbus is looking at ways of increasing A350-1000 production," a person familiar with the matter told Reuters.
It was not immediately clear whether this would be at the expense of production for the two smaller models of A350 or mean an increase in total production. There has been speculation the A350-800 could be scaled back to focus on larger models.
A spokeswoman for EADS subsidiary Airbus declined specific comment on production for the A350-1000, but said production for the overall series - officially known as the A350 XWB - was designed to accommodate changes in demand.
"The A350 XWB final assembly line is designed to be flexible and to be able to produce all three members of the A350 family (-800, -900, -1000)," the spokeswoman said by email.
"We are working on a ramp-up to 10 per month to be reached four years after the first A350 XWB delivery and are constantly and closely following market trends so that we anticipate and adapt our production to meet our customers' needs."
At first, Airbus will focus on production of the 314-seat A350-900, the best-selling of all three A350 models and one designed to compete head-to-head with the 787 Dreamliner, which entered regular service in Japan almost exactly a year ago.
First flight is planned for mid-2013 and first delivery for the second half of the following year, suggesting the full production rate will be achieved in late 2018. The first A350-1000 is due in 2017 but it is sold out until late-decade.
Airbus is locked in a psychological battle with Boeing over the A350-1000, which was recently beefed up with a more powerful Rolls-Royce engine to improve payload and range.
Boeing produces seven 777s a month and plans to lift this to 8.3 after a record sales streak for the jet, which was extended by a $4.5 billion Turkish Airlines order on Monday.
But even the 777's industry fans acknowledge the 1990s metal design will eventually face headwinds from the A350-1000's lighter design, and Boeing has been toying for months with a 777 revamp that includes less thirsty engines and new wings.
While Boeing is under pressure from top buyers such as Emirates to firm up its plans for the 777X, as the tentative new version is known, Airbus is under pressure to score quick sales of the A350-1000 to recoup lost momentum. It says the plane offers significant savings over the current 777.
After a flurry when the A350 was launched in 2007, sales of the 350-seat A350-1000 went quiet until Hong Kong's Cathay Pacific placed a new order for 10 and upgraded orders for 16 of the smaller A350-900 model in July.
Industry analysts say that as well as pushing new sales, Airbus is actively trying to persuade buyers of its smaller A350-900 to trade up in pursuit of more payload and range, and a further rejigging of the order backlog cannot be ruled out.
On Tuesday, French Prime Minister Jean-Marc Ayrault will inaugurate the A350 plant in Toulouse in honour of one the European jetmaker's French founders amid a row over investment.
Germany is withholding half of an estimated 1.2 billion euro A350 development loan to voice unease over jobs.
The ceremony may also be held against a backdrop of fresh trade clashes with the United States, which wants to include the A350 in a long-running transatlantic subsidy dispute.
Washington has been studying European A350 data since last month and trade sources say it could give a response by Tuesday. (Editing by Mark Potter)
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