Airbus launches bigger A350 for 10 bln dollars

FARNBOROUGH, England, July 17 (Reuters) Crisis-hit European planemaker Airbus unveiled a billion revamp of its planned A350 mid-sized jets on Monday as it battles to catch up with U.S.

arch-rival Boeing.

Airbus, badly trailing Boeing in orders for new planes this year, said it would build three versions of the A350 instead of two and tossed out a fuselage design it has relied on for decades to offer what it calls an ''extra wide body'' jet.

The billion bill is about twice as much as Airbus had originally envisaged and the planemaker said it would seek government aid from its partner countries, France, Germany, Spain and the UK -- potentially inflaming a World Trade Organisation dispute with Boeing over subsidies.

Airbus, 80-percent-owned by European aerospace group EADS, unveiled the aircraft at the start of the Farnborough air show hoping the end of a two-year muddle over its design would restore its credibility after a series of damaging setbacks.

It also announced a review of the supply chain for its A380 superjumbo after problems led it to delay deliveries.

News of the A380 delay last month pummelled shares in EADS and Britain's BAE Systems, which owns the remaining 20 percent of Airbus. It also sparked a management shake-up at both EADS and Airbus.

New Airbus CEO Christian Streiff, an industry outsider with a reputation for sorting out industrial problems, said the once self-confident European planemaker was ''learning to be humble.'' ''Airbus is in the middle of a severe crisis in its relations with its customers,'' Streiff said, adding he wanted three months to prepare for formal industrial launch of the new A350 project.

Boeing, in contrast, has been flying high. After losing the battle for new orders for five straight years, it beat Airbus 4-to-1 in the first half of 2006 amid strong demand for its 777 model, as well as 787 mid-sized jet, due 2008.

Airbus overhauled the A350 to meet the challenge from these planes as well as customer calls for an all-new design, rather than the previously proposed upgrade of an existing model.

The world's largest plane leasing firm International Lease Finance Corp (ILFC) told Reuters it was happy with the revamp and would not cancel its existing orders for 16 planes.

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