"Two years ago, we in Airbus obviously underestimated this animal," Gustav Humbert, the new Airbus boss, acknowledged at the air show in Berlin.
Airbus has won only 100 firm orders for the A350. Boeing has more than 350 for the 787, plus 40 more commitments. The 787 will enter airline service in May 2008 with All Nippon Airways of Japan.
Originally, Airbus had said the A350 would not be available until 2010, though that date had slipped in recent months.
It is not clear when Airbus could have an all-new plane ready, but probably not before 2012 at the earliest.
Airbus did not acknowledge that it needed to do more with the A350 until a couple of months ago, when Steve Hazy, the head of International Lease Finance Corp., one of the biggest Boeing and Airbus customers, stood up at an industry conference and said Airbus should seriously rethink the A350. The lease group had already ordered both the 787 and A350.
A month later, Singapore Airline's Chew, in an interview with the P-I, echoed that criticism, saying the A350 needed a new and wider fuselage to match that of the 787.
On the sidelines of the IATA conference this week, Tim Clark, president of Emirates, the largest Arab airline, said he wanted to shout "hallelujah" when Hazy made his public A350 criticism.
Essentially, Hazy said the A350 "sucks," Clark said, and he was right.
Emirates, which has ordered more than 40 A380s from Airbus and more than 40 777s from Boeing, is considering the 787. It was one of several airlines that persuaded Boeing to develop the 787-10, a bigger 787 that will seat more than 300 passengers. Boeing has said the 787-10 will be available around 2012.
"We continue to be impressed with the 787," Clark said in an interview, adding that he expected a detailed briefing from Airbus as soon as today about its plans for a new and improved A350.
Clark said Emirates wants an all-new plane, not one that was "not ready for the 21st century." He was referring to the previous version of the A350 that Airbus had been offering.
The problem for Airbus is how it can take on both the 777 and the smaller 787 with one plane - if that's what Airbus decides to do.
The 777, which can seat from 300 to more than 350 passengers, has been winning almost all the orders over the competing Airbus product, the four-engine A340.
Boeing sold more than 150 777s last year. Airbus sold only a handful of A340s.
Airlines say they want the more fuel-efficient two-engine Boeing jet.
But the 787 is smaller than the 777. The 787-8, the base plane, will seat fewer than 250 passengers and the bigger 787-9 fewer than 300. Only the 787-10 will be able to carry more than 300 passengers in a typical three-class configuration.
When the 787-10 comes along, it is likely to replace the similar-sized 777-200ER. But the bigger 777-300ER has been Boeing's best-selling 777 the last two years. That plane is already well-established, and it will be difficult for Airbus to displace it, said Randy Baseler, vice president of marketing for Boeing Commercial Airplanes.
And if Airbus takes aim at the 777 with a bigger A370, then what will it do against the smaller 787? Baseler asked. Making a big plane smaller also makes it less efficient. That's why airplane makers develop stretch versions later and not smaller models.
"We don't seen anything (Airbus) can do that will significantly change what we are doing," Baseler said in an interview at the IATA meeting.
"But they are smart guys," he added. "I'm sure they will figure something out."
Just what, however, remains to be seen.
Exactly what Airbus will do is not clear, but speculation about the A370 was the buzz at the IATA meeting in Paris.
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