Mission: Compete With 7E7

EADS and BAE Systems have given their joint effort, Airbus, the okay to go ahead with production of the A350 -- a A330 derivative designed specifically to compete with Boeing's new 7E7 Dreamliner. This time, the battle for supremacy in the commercial passenger market is head-to-head.

Under the current plan, Airbus says its A350 will enter service in 2010.

"Airbus has presented a strong business case for the launch of this very significant new aircraft," Mike Turner, chief executive of BAE Systems, said in a statement quoted by the Seattle Post-Intelligencer.

In the meantime, Boeing, which has been watching developments in the A350 story very closely since announcing its own plans to put its Dreamliner into service by 2008.

Putting the A350 into the sky, according to Airbus, will cost about $5.3 billion, while the 7E7 project is considerably more expensive. Of the $10 billion or so it will take to develop the Dreamliner, Boeing is expected to pay about $6 billion. The rest will be coughed up by Boeing's various partners.

The payoff, however, could we be huge. If Boeing and Airbus can't agree on much else, they both see the potential market for a fuel-efficient, wide-body twin at approximately 3,000 aircraft over the next two decades.

Boeing's VP of Marketing, Randy Baseler, made a show of downplaying the Airbus announcement, made on Friday.

"We love it," Randy Baseler said of the announcement by Airbus. "This takes their twin-aisle strategy and turns it upside down."

Indeed, at the very least, it would appear that Airbus is hedging its bets. While Boeing has long considered point-to-point, fuel-efficient flight the future of the industry, Airbus has been banking on the success of its huge A380 (right) -- an airplane so big, special ramp facilities will have to be built at most airports just to accommodate it. The Airbus model has relied on putting a lot of people in a single plane as part of a hub-spoke system.

"This just validates our approach to the market," Baseler told the Seattle paper, "and what we have been saying all along about two-engine planes versus four-engine planes. We see this as a pretty good day."

Airbus isn't shy, though, about trying to harsh Boeing's buzz on the 7E7. "You will see a significant portion of customers that Boeing thought they might have for the 7E7 now switching to the A350," Airbus's head of commercial operations, said, as quoted by Reuters.

FMI: www.boeing.com, www.airbus.com