Airbus eyes 3 new planes to battle Boeing -sources

LONDON, July 14 (Reuters) Airbus will expand its offering of two new mid-sized planes to three in order to catch up with surging rival Boeing Co., industry sources said on Friday.

Worried that its pair of proposed A350 models aimed at competing with the Boeing 787 due in 2008 will do little to slow sales of Boeing's larger 777, France-based Airbus will add a third, larger model.

''They are definitely looking at doing three,'' one industry source said, adding that the new planes were likely to be named the A350-800, A350-900 and A350-1,000. There was a chance Airbus could go with the name A370, he added.

A second source confirmed the story, saying: ''It is designed to take on both the 787 and triple-7.'' A spokesman for Airbus declined to comment on specifics, but said Airbus' chief executive would provide an update at the year's biggest air show next week: ''Christian Streiff will be responding to feedback from customers received over recent months on Monday.'' The additional model could benefit suppliers such as steelmaker Alcoa Inc. and Goodrich Corp., a maker of nacelles and thrust reversers.

It also means Airbus will look to engine makers GE Aviation and Rolls-Royce for more than the one engine each has so far committed to build as the three models will range from 250 to 400 seats and fly different distances.

Pratt&Whitney could also bid on the bigger engine, analysts said.

First deliveries, which Airbus had hoped to begin in 2010, will likely slip to 2012, with some versions even later.

A350 CRITICISED Airbus has been talking about the A350 since 2004 and has signed 10 customers for 100 of them.

But one powerful buyer, International Lease Finance Corp. boss Steven Udvar-Hazy, in March lashed out at Airbus for not thinking the project through, and warned the A350 as it stood was destined to win as little as 25 percent market share versus the 787.

Singapore Airlines was seen as a possible A350 customer but said last month it would buy up to 40 of the Boeing 787, underscoring the need for Airbus to do better.

The sources said Airbus is still at work defining details of the A350 but has taken on board the need to increase the model's appeal, offering a new, wider fuselage and a third, larger version.

Airbus is in the spotlight ahead of the Farnborough International Airshow, the year's largest in business terms, which opens near London next Monday.

The biennial event is usually a frenzied duel with Boeing to announce as many new deals as possible, a battle which saw the two planemakers take the lion's share of the billion in announced business in 2004.

The sources said Airbus is not ready to formally launch the A350 at Farnborough, because Airbus CEO Streiff, brought in to sort out costly delays of the mammoth A380 superjumbo, has been in place less than a month.

Still, they said Airbus was determined to go forward with the A350 soon, a move some analysts say the planemaker must make to stay level with its U.S. rival.

''It makes a lot of sense,'' said an aerospace analyst at one London-based brokerage.

Boeing says the market for the 787, 777 and A350 will be the industry's most lucrative over the next two decades.

Analysts say development of the A350 will cost billion, a figure likely to escalate a clash between the European Union and Washington, which have filed complaints with the World Trade Organisation (WTO) about government support for Boeing and Airbus, respectively.

Airbus initially estimated the new model would cost no more than 4 billion euros (.07 billion), and made clear that it would again ask Britain, France, Germany and Spain for loans to fund a third of the development.

REUTERS DKS PM1822