UPDATE 1-Qatar upgrades Airbus A350 order -sources

LONDON Mon Dec 3, 2012 8:19am EST

LONDON Dec 3 (Reuters) - Qatar Airways is set to upgrade an order for 20 Airbus A350 aircraft to larger variants, a move that includes new backing for a model designed to compete with Boeing's 777 mini-jumbo, aviation sources said on Monday.

Qatar Airways is the launch customer for the future A350 and is also a major user of the 777, Boeing's most profitable plane.

The two smallest models of A350 are designed to compete with the Boeing 787 Dreamliner while the largest, the 350-seat A350-1000, aims for a crucial niche dominated by the 777.

Qatar is expected to upgrade its order for the large A350-1000 variant to 37 planes from 20 and to increase its order for the base model, the A350-900, by some three planes to 43.

However this means scrapping an order for the A350-800, the smallest version of the carbon-composite jetliner series, which faces industry speculation about its future due to weak sales.

Airbus declined comment. Qatar Airways was not immediately available for comment.

The upgraded order will net Airbus an extra $2.8 billion at list prices.

Airbus has been campaigning for a second airline endorsement for the A350-1000 after a blank patch ended with a $4 billion order from Cathay Pacific in July.

Many experts see the lucrative market for jets just below 400 seats as the next major battleground between the world's top planemakers. Boeing is looking at revamping its 777 design.