PARIS (AP) – Airbus announced Monday a $13.2 billion plan to build its A350 XWB wide-bodied jet, which is designed to compete with Boeing Co.'s successful 787 and boost the fortunes of the troubled European planemaker.
In a news conference, Airbus' CEO Louis Gallois said that the A350 will be funded through the savings generated by a painful cost-cutting plan, from cash flow and from Airbus' partners.
The cost-saving plan was announced in the wake of delays to the A380 superjumbo and management turmoil that has shaken the company and its parent, the European Aeronautic Defence & Space Co. (EADS).
EADS approved the A350 plan on Friday. No timetable was released, and Gallois said labor unions and local authorities will be informed at the beginning of 2007 where the plane will be made.
The new plane is badly needed to fill a gap in the Airbus product line and stem a loss of business to Chicago-based Boeing.
After concentrating massive resources on its flagship A380, the world's biggest passenger plane, Airbus has been outmaneuvered by Boeing's two-engine 787, which delivers better fuel economy than older four-engine Airbus jets in the same size category.