First Plane To Enter Service In 2013

ANN REALTIME UPDATE 12.01.06 1815 EST: It's officially official! Late Friday afternoon, the board at EADS gave the go-ahead for the development and production of the Airbus A350XWB, a new widebody airliner to compete against the Boeing 787 Dreamliner, and the Boeing 777.

The approval does not come without some bad news for Airbus, however. Under the plan approved by EADS Friday, the first A350XWB will not enter revenue service until 2013 at the earliest -- one year later than was announced at the unveiling of the XWB program in July, and five years after the 787 is scheduled to enter service.

Barring significant delays in the Boeing program, that will likely give the Dreamliner a significant head-start in the midsize airliner market. As they say, however... better late, than never.

Original Report

It's official -- the Airbus A350XWB program may soon move from the realm of the theoretical into the practical, as shareholders at parent company EADS have authorized an approximately $13 billion financing package to pay for the plane's development.

The Financial Times reports shareholders at the European Aeronautics Defense and Space Co. voted Thursday night on the funding plan, which calls on EADS to provide about $8 billion upfront, with the remaining $5 billion coming in loan guarantees from governments with a stake in the aerospace consortium -- France, Britain, Germany, and Spain.

The plan will go before the EADS board Friday... where a source close to the deal tells Reuters it is 90 percent certain to pass muster.

"There are two outstanding issues: state aid and the German position, but the hardest bits were dealt with yesterday," the source said.

As Aero-News reported, Germany's DaimlerChrysler is looking to reduce its stake in EADS from the current 22.5 percent, to closer to 15 percent. A group of German banks is rumored to be interested in the sale -- and that would mix up the percentage of funding due to come from DaimlerChrysler.

As it stands, the $5 billion loan guarantee package is nearly five times the original government commitment on the A350 program -- but that was before Airbus thoroughly redesigned the plane, to present a more worthy competitor to the upcoming Boeing 787 Dreamliner. The added costs come from the more clean-sheet approach to the XWB; the original A350 was heavily based on the current Airbus A330 twinjet.

The added government subsidies are likely to further increase tensions between the United States and the European Union. Both sides are locked in a bitter dispute before World Trade Organization, each accusing the other of providing illegal aid to their respective aerospace manufacturers.

If approved, first flight of the A350XWB is slated for 2012.

FMI: www.airbus.com, www.eads.com