Airbus May Detail The A370 As Its Latest Answer To Boeing

Exactly what Airbus will do is not clear, but speculation about the A370 was the buzz at the IATA meeting in Paris.


Airbus appears to be nearing a decision to tell airlines the specifics of its plans to develop an all-new commercial jetliner, possibly to be called the A370, as it seeks to blunt The Boeing Co.'s growing market dominance with the twin-engine 777 and the soon-to-be 787 Dreamliner.

Exactly what Airbus will do is not clear, but speculation about the A370 was the buzz in Paris the last two days during the annual meeting of the International Air Transport Association.

Airbus isn't talking, at least to reporters, but among the 260 airline members of IATA are several that want Airbus to spell out its plans - soon. They have already ordered the A350, an airplane that Airbus is now widely expected to abandon in favor of an all-new design.

Qatar Airways has committed to buy 60 A350s. It is the biggest customer for the plane.

Akbar Al Baker, Qatar's chief executive, told the Seattle P-I at the IATA meeting that Airbus will brief his airline on its plans Tuesday.

Qatar could reconsider Boeing's 787 if Airbus is not forthcoming about its intentions for the A350 or a new design, he said.

And Singapore Airlines Chief Executive Chew Choon Seng, in an interview in Paris, said his airline is likely to decide this month between Boeing's 787 or the Airbus offering. In early May, Singapore Airlines' board postponed a decision on what was expected to be a substantial order for the 787 to allow Airbus more time to figure out what it would do in response to criticism - from Chew and others - that the A350 was inadequate.

The comments during the IATA meeting from Al Baker and Chew suggest that Airbus is finalizing technical details about its plane and will tell potential customers first before making any public announcement.

An official announcement could come before or during the Farnborough Air Show outside London in mid-July. This is the industry's biggest event of the year, with media coverage from around the world.

Some details about what Airbus is thinking could emerge next week when the airplane maker hosts its annual technical briefing for analysts and the trade press in Toulouse, France.

Boeing, meanwhile, is in the catbird seat. It is quietly going about the business of trying to sell airlines more 777s and 787s. Just last week, Boeing added 20 more 777s to its order book from unidentified customers. On Tuesday, Continental Airlines announced that it was buying 10 more 787 Dreamliners. It had previously ordered 10.

Scott Carson, head of Boeing's jetliner sales unit and one of several Boeing commercial executives at the IATA meeting, said the industry uncertainty about what Airbus will do with the A350 has had little effect on Boeing's sales efforts. Boeing is confident of its strategy with the 777 and 787, he said.

Two years ago, Airbus executives were dismissing the 787, saying they could easily match it with a derivative of the popular Airbus A330. The A330 was clobbering Boeing's 767 in sales, and the 787 was developed as a 767 replacement. The A350, Airbus said at the time, would have an improved wing and the same fuel-efficient engines as the 787. But Airbus decided not to change the A330 fuselage. A derivative plane is much cheaper to develop than an all-new design.

Airbus now admits that it greatly underestimated the 787, which will be the industry's first large commercial jetliner with a mostly composite airframe, including fuselage. The lighter 787 will be much more fuel-efficient than today's jets, with far longer maintenance intervals, and that has given Boeing a huge marketing advantage.

Chew said he is impressed with the 787. Singapore Airlines, one of the world's leading airlines, spent $1 billion more on fuel in 2005 than in 2004. And the price of fuel has gone up significantly this year. Fuel is now more than 40 percent of Singapore Airlines' direct operating cost. That makes a plane like the 787 very attractive.

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