Airbus won approval from the board of its parent company late on Friday to begin development of the A350-XWB family of passenger jets, a redesigned midsize plane that the European plane maker hopes will compete against the Boeing 777 and the 787 Dreamliner.
The board of the parent company, the European Aeronautics Defense and Space Co (EADS), approved plans for the development of a re-engineered and wider-bodied A350 at a cost of 10 billion euros (US$13 billion) at a meeting in Amsterdam. In a statement, the company said that the plane would be financed primarily from Airbus cash flows and from partners, but provided few details.
"The decision follows a thorough review of all the resources available to ensure a smooth development of the family backed by a very sound program planning," Louis Gallois, the chief executive of Airbus and a co-chief executive of EADS, said.
PHOTO: EPA
Financing had been a major sticking point in winning approval from the company's core shareholders. The group's biggest private shareholders -- the German automaker DaimlerChrysler and the French conglomerate Lagardere -- have been pushing to issue bonds to raise money for the plane, people briefed on the negotiations said last week. But the French government had proposed an issue of new EADS shares that it would have purchased, a move that would have increased the French state's 15 percent stake at the expense of other core shareholders.
EADS said in a statement on Friday that it expected to spread the development costs of the program from next year to 2014 with the bulk of the spending occurring from 2010 to 2013.
Airbus has promoted the A350 XWB -- as in extra wide body -- as the linchpin of its recovery. The company has suffered costly setbacks to its A380 superjumbo project, and said last month that the project would be delayed two years.
The A350, which will carry 250 to 375 passengers, is intended to challenge Boeing's 787 and 777, and is scheduled to enter service in 2013, the company said.
Preserving the A350 name is a reminder that this is not a wholly new plane, but a redesign of the earlier A350, which had disappointed airlines and seemed likely to be an also-ran to Boeing's 787. Airbus contends that the new version surpasses the 787 in several respects, especially its cabin, which is 13cm wider than the cabin of the Boeing plane.
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