Disagreement over the funding of a $10-billion new plane project at Airbus has forced parent firm EADS to cancel a board meeting today which was due to decide on whether to go ahead with the development, an industry source said.
Airbus has spent two years grappling with the design of the A350 while archrival Boeing has gone ahead with producing its 787 Dreamliner, winning more than 400 orders for the plane which is due to go into commercial service in 2008.
The source said that founding EADS shareholders Lagardere and DaimlerChrysler had concerns over the funding of the A350, now called the A350 XWB (extra wide body). EADS declined to comment.
The company has said the project would cost about $10 billion. Airbus this week set forth its long-term market outlook, which sees demand for more than 5,000 mid-sized planes over the next two decades.
The challenge for the planemaker is making sure the A350 XWB is the right design to capture a chunk of that market. Airbus has secured orders for 100 planes, but they were for earlier proposed versions of the A350. The A350 XWB, which was unveiled in July, has not yet won a single order.
Costly delays in production of the A380 superjumbo and surging demand for Boeing's 787 have rocked Airbus, which is on its third chief executive in a year.
Meanwhile Europe's biggest defence firm BAE Systems has just sold its 20 percent stake in the planemaker to EADS and both DaimlerChrysler and Lagardere are in the process of lowering their stakes in EADS.
Airbus's single-aisle A320 family of planes are still selling well but the planemaker is losing badly to Boeing in larger models, casting doubt on the future of the four-engined A340 and suggesting the planemaker may face higher than expected research and development costs to restore the competitiveness of its product range.