PARIS European planemaker Airbus suffered a fresh setback to its largest twin-engined jet development, the A350-1000, when it emerged that Gulf carrier Etihad had cancelled seven aircraft worth $2.3 billion at current list prices.
The Abu Dhabi-based airline has now halved its order for the 350-seat jet in four months from 25 in November to 12 at the end of April, Airbus monthly figures showed on Monday.
Airbus has not sold any of the largest variant of its next-generation A350 since beefing up the design with bigger Rolls-Royce (RR.L) engines last June, while Boeing has been notching up record orders of the wide-body 777.
Airbus says it is confident a market will flourish for the long-distance jet and has said its only difficulty is the shortage of available delivery slots before 2018 or 2019.
"The A350-1000 is consistently more capable than the (Boeing) 777-300ER. It will cover the world with 25 percent less fuel burn," an Airbus spokesman said.
Etihad was not immediately available for comment.
Airbus pushed back development of the stretched A350-1000 by two years when it decided to overhaul the design last year. The $320 million jet is now due to enter service in mid-2017.
While smaller versions of the A350 are designed to compete with the Boeing 787 Dreamliner, built using similar carbon-fiber materials, the A350-1000 targets Boeing's older 777-300ER.
The Boeing 777 is a 1990s metallic aircraft but dominates a category of its own with seating for 365 passengers in normal layout and a long range. Some A350 customers such as Qatar Airways and Dubai's Emirates have criticized the A350-1000 for failing to deliver a knock-out punch to Boeing's mini-jumbo.
Boeing is considering a refresh of its 777 with new wings and new engines to enter service near the end of the decade.
Etihad ordered the next generation of Airbus jets in July 2008, saying it would be among the world's most efficient.
The reduced A350-1000 order comes as Airbus makes a relatively slow start to the year after dominating the market in 2011 thanks to a revamp of its best-selling medium-range A320.
Boeing is catching up with a makeover of its own most-sold 737 model and is so far on track to win the annual order race against its only serious rival for the first time since 2006.
Airbus took a total of 12 new orders in April, bringing its total for the year to 112. Adjusted for cancellations, net orders for the year to date stood at 95 passenger jets.
The EADS EAD.PA subsidiary delivered 183 aircraft in the January-April period, including five A380 superjumbos.
Boeing sold 444 aircraft between the start of the year and May 1, or a net total of 415 when adjusted for reductions that included a high-profile Chinese cancellation of 24 Dreamliners.
(Reporting by Tim Hepher; Editing by Elena Berton)