Airbus executives yesterday unveiled the much-anticipated revamp of its mid-sized A350 passenger jet, as they admitted the company was in the middle of a "serious crisis" that was being exploited by its US rival Boeing.
The European aircraft maker's new chief executive, Christian Streiff, who has been in his job for two weeks, said about $10 billion (€7.9 billion) would be spent to develop a new aircraft that would be called the A350XWB, for "extra-wide body", and enter service in 2012.
Airbus has been hit by problems at its Franco-German parent, EADS, which led to delays in the delivery of the A380 superjumbo and resulted in the resignation of Noël Forgeard, the French co-chief executive of EADS, and Gustav Humbert, the Airbus chief executive.
It has also suffered a drop in aircraft orders that left it trailing Boeing, which announced several orders yesterday for passenger and cargo aircraft.
Speaking at Britain's Farnborough airshow, Mr Streiff acknowledged Airbus's difficulties.
"Yes, Airbus [ is] in the middle of a serious crisis in our relationship with our customers," he told a news conference.
"Yes, this is something we are taking extremely seriously inside Airbus and, yes, we know the competition is taking advantage of this."
In an attempt to reassure Airbus's customers and investors, Mr Streiff said he was going to personally oversee "all aspects" of the new A350XWB programme for the next three months.
Airbus said the new aircraft would be superior to Boeing's 787 Dreamliner - it would have more powerful engines, a wider body and an advanced cockpit, as well as a redesigned cabin with bigger windows.
But Boeing has outstripped Airbus in terms of orders in the first half of this year.
The Dreamliner, which is due to enter service in mid-2008, won 360 firm orders compared with only 100 for the A350.
The cost of the reworked A350 is almost double the €4.35 billion proposed for the earlier, much more modest, versions but it is the price of securing Airbus's ability to continue to offer credible aircraft in all segments of the big jet market.
Civil aviation ministers from Airbus's partner countries of France, Germany, Spain and the UK announced at Farnborough they were still confident the aircraft maker would address industrial issues with its A380 superjumbo and that its programme would be commercially successful.
Meanwhile, the French government could be reviving attempts to renegotiate its rights under the shareholder pact that governs its 15 per cent stake in EADS.
Currently it is barred from any operational input at EADS, although it has the right to veto board appointments.
Lagardère, the conglomerate that owns 7.5 per cent of EADS, manages the combined French interests in a separate holding company, Sogeade.
