AIRBUS IS NARROWING THE DIVIDE

Airbus racked up more orders for its A350 XWB aircraft on Wednesday, striking back a day after its U.S. rival, The Boeing Co., snagged the troubled jet's original launch customer for its own 787 Dreamliner.

In announcements timed to make a splash at the weeklong Paris Air Show, Airbus landed orders or commitments for a total of 166 aircraft Wednesday, bringing its haul for the first three days of the event to 548 - worth a total of $75.7 billion on the basis of catalog prices.

Of the three-day tally, 358 aircraft were firm orders and 190 were commitments that are likely to be converted into firm orders in the coming months.

Russian airline Aeroflot signed a firm deal for 22 of the revamped A350 aircraft, and Airbus received commitments from India's Kingfisher Airlines and Libya's Afriqiyah Airways to buy 56 more.

The deals announced Wednesday add to a big order from Qatar Airways earlier in the week for 80 of the planes, taking the total firm orders for the plane so far to 134.

However, despite the flurry of deals at the fair in Le Bourget, north of Paris, that is still far behind the 634 orders for Boeing's Dreamliner.

"It's short-term good news, but it doesn't affect the long-term reality," said Doug McVitie, who is managing director of Dinan, France-based forecaster Arran Aerospace. "Airbus needs a number of quality, new customers. Many of these announcements are conversions of orders for an earlier model of the A350."

Airbus has been fighting an uphill battle against the Dreamliner to win customers in the lucrative commercial medium-sized long-range jet market since it was forced into an expensive redesign of the aircraft by unhappy customers - resulting in the extra-wide-body, or XWB, model.

The changes have pushed back the first delivery date of the plane until 2013, years behind the first delivery of Boeing's 787 due in May 2008, which is now sold out for delivery until 2013.

Airbus has so far failed to attract a firm commitment from International Lease Finance Corp., which had a preliminary agreement for 16 of an earlier version of the plane. Singapore Airlines Ltd. hasn't confirmed an order for 20 of the current model.

Steven Udvar-Hazy, the head of Los Angeles-based ILFC, has criticized past designs of the A350 and says Airbus hasn't provided enough details for it to buy the A350 XWB. "The basics of the plane like size are fixed, but it still needs some optimization," Hazy said Tuesday after placing the 787 order.

"They need to get a stamp of approval from Hazy," said Richard Aboulafia, vice president of the Teal Group, a Fairfax, Va.-based consulting company. "If they do that, it would strengthen every customer's perception and make financing easier because it would raise residual values."

John Leahy, Airbus' chief commercial officer and top salesman, said Wednesday during a news conference on leasing company CIT Aerospace's order for seven of the A350s that he's still trying to convince ILFC, which has a fleet of 900 planes valued at $45 billion, to buy the A350.

"I was having lunch today with Steve Hazy and it was becoming apparent that Steve is catching up with us on design of the plane," Leahy said. "We're in discussions with ILFC."

One issue for potential customers is that only one engine maker, Rolls-Royce Group Plc, has agreed to provide turbines for the plane, Airbus Chief Financial Officer Hans Peter Ring said in an interview Tuesday.

The company is still in talks with General Electric Co., the world's largest maker of jet engines, to equip the aircraft with a turbine as well.

Boeing, meanwhile, announced a 16-plane order from Air France-KLM Group valued at $2.7 billion as the airline replaces old planes and boosts fuel efficiency.

Air France, Europe's biggest airline, purchased seven single-aisle 737s and nine 777- 300ERs, Boeing Commercial Airplanes Chief Executive Scott Carson said. It is the first joint aircraft purchase since Air France and KLM merged in 2004. The order had been disclosed as being from an unidentified customer on Boeing's Web site.

This report includes information from The Associated Press and Bloomberg News.



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