* Senior engineers review plans to upgrade best-selling jet
* 80/20 odds in favour of engine project go-ahead -sources
* Airbus management, EADS board must give green light
By Tim Hepher
PARIS, Sept 30 Airbus engineers will report to
the planemaker's top management next week on plans to upgrade
its A320 jet family with new engines and the 1 billion-to-2
billion euro project ($1.36 billion-$2.73 billion) is 80
percent likely to go ahead, industry sources said.
A final decision will depend on approval by Airbus'
executive committee and then on a further green light from the
board of Franco-German-led parent company EADS EAD.PA.
A "wise men" group of current and former senior engineers
met on Thursday to dissect proposals to modernise Airbus'
best-selling model by taking advantage of new engines that
offer airlines 15 percent fuel savings in the face of high oil
No immediate decision was taken but the group will report
its findings to senior Airbus management in Toulouse next week,
a source familiar with the matter said.
The industry sources declined to be identified because the
discussions are still confidential.
An Airbus spokesman said, "We do not comment on internal
Airbus Chief Executive Tom Enders has called for a review
of engineering resources before deciding whether to back the
proposal in order to prevent disruption of other key projects.
But senior executives say the odds are "80/20" in its favour.
Airbus faces a number of delays on larger plane projects
including the A380 superjumbo and A400M military transporter
and is wrestling with a tight schedule for its next big plane,
the 270-350-seat A350 wide-body jet due to be delivered in
Sales chief John Leahy believes upgrading the 150-seat
A320, which along with related models generates most of
Airbus's cash, is needed to fend off growing competition in the
lower end of an airliner market dominated by Airbus and Boeing
Thursday's engineering summit came as rival Boeing
announced a further delay to its 747-8 Freighter, a
significantly reworked version of its legendary jumbo jet.
Analysts said the delay might further erode the chances that
Boeing would decide to put new engines on its 737 family, which
competes with the A320. [ID:nN30156233]
The prospects of Boeing matching Airbus on "re-engining"
had already been described as slim, at least in the short
Its 737 jetliner is lower to the ground than the A320 and
would need costlier structural changes such as new or modified
landing gear to accommodate larger engines under the wings.
Boeing executives have also expressed doubts over whether
there is enough demand for re-powered single-aisle planes; the
alternative is to wait a few more years until the whole plane
can be redesigned with newer technology to leapfrog Airbus.
However, analysts say Boeing's stance will only be fully
evaluated once Airbus announces its next strategic move.
Single-aisle product strategy is key to revenues and
profits at both planemakers. Airbus delivered single-aisle
planes worth some $33 billion at today's list prices last year,
though in practice planes are sold at a discount.
The new Airbus version would offer a choice of new engines
from General Electric-Safran (GE.N) (SAF.PA) joint-venture CFM
International and United Technologies (UTX.N) unit Pratt &
Whitney. They would be fitted as an option instead of current
models from CFM and a consortium that includes Pratt &
$1 = 0.7337 euro
(Reporting by Tim Hepher, editing by Matthew Lewis)