AIRSHOW-Air France A350 order back on after spat -sources

PARIS, June 18 Tue Jun 18, 2013 1:15pm EDT

PARIS, June 18 (Reuters) - Air France looks poised to sign a long-awaited $7 billion deal to buy 25 Airbus A350 jets after talks narrowly avoided collapse, industry sources said on Tuesday.

Air France has been at loggerheads with its suppliers over issues mainly including maintenance of the plane's Rolls-Royce engines ever since the deal was first mooted in 2011.

Further disagreements delayed prospects of the high-profile deal being announced at the Paris Airshow, which has been dominated so far by wide-body announcements from Boeing, but it could now take shape as early as Wednesday.

Airbus and Air France, the French network of Franco-Dutch airline group Air France-KLM, both declined any comment.

Air France and Rolls-Royce have clashed over conflicting ideas for engine supply deals. Engine makers rely increasingly on hourly service deals including maintenance to secure margins while Air France wants to keep doing maintenance in-house.

Air France traditionally orders engines from Rolls' U.S. rival General Electric, but the A350 is powered exclusively by Rolls-Royce Trent XWB engines. Rolls-Royce has consistently declined to comment on the dispute.

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