Final Decision Expected December 10th

EADS, the European parent company of commercial plane-maker Airbus, gave its tentative approval to creation of a new model that will rival Boeing's 7E7 -- the Airbus A350.

"The Board fully supports the proposal brought forward by the Airbus management," EADS said in a prepared statement issued after Monday's board meeting.

But will the A350 be a drain on Airbus's effort to build the mammoth A380? Building the A350 would cost Airbus about $5.3 billion. About a third of that could come from European governments, but that is still to be determined through negotiations, according to Reuters.

That will almost certainly rankle Boeing. The Chicago-based company, along with the Bush administration, is locked in a bitter fight with Airbus over government subsidies, a battle being played out before the World Trade Organization after the US filed a formal complaint. Airbus countered with its own allegations that tax concessions granted Boeing by local governments anxious to land the company's manufacturing components.

Airbus chairman Noel Forgeard has said the A350 will be built with technology derived from the A380 project and will likely use the fuselage of an A330.

FMI: www.airbus.com