Boeing's new 787 has an official challenger. Airbus' major shareholders yesterday approved the launch of the new A350. The two global airplane...

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Boeing’s new 787 has an official challenger. Airbus’ major shareholders yesterday approved the launch of the new A350.

The two global airplane giants will now go head-to-head with new jet programs in overlapping market segments. The emerging battle will dominate commercial aerospace for the next five to 10 years and should determine world leadership in the business.

“The A350 compares very favorably with the 787,” said Airbus Chief Executive Gustav Humbert in a videotaped statement. “The A350 is bigger, flies further and is cheaper to operate.”

Airbus listed 140 “firm commitments” for the airplane and said it would soon turn those into orders. Noël Forgeard, chairman of European Aeronautic Defence & Space (EADS), parent of Airbus, said he expects to have 200 firm orders on the books by year end.

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The A350 is scheduled to enter service by 2010. The first versions of the 787 will enter service two years earlier.

Boeing has 174 firm orders plus 99 publicly announced commitments to buy.

The green light for the A350 came wrapped with an offer from EADS not to draw on any European government launch loans to pay for the project through next year.

This offer was ostensibly to give the United States and the European Union more time to negotiate their dispute over subsidies to the airplane makers, now before the World Trade Organization.

The offer got nowhere. Both Boeing and the U.S. government immediately dismissed it.

EADS, the French-, German- and Spanish-owned company that owns 80 percent of Airbus, and Britain’s BAE Systems, which owns 20 percent, formally approved the launch of two versions of the A350 at a board meeting yesterday.

Using the configuration data supplied by Airbus, the smaller A350-800 would compete directly with the 787; the larger A350-900 would go head-to-head with the 777-200.

However, Boeing’s vice president of marketing, Randy Baseler, said Airbus is exaggerating its seating projections and that the larger A350 won’t match up against the 777.

He claimed, instead, the plane’s number of passengers would be comparable to that of the stretch version of the 787, the 787-9.

Airbus did not make executives available for interview ahead of a Paris news conference scheduled for today. Instead, EADS released a slick video showing Forgeard and Humbert commenting on the new airplane and its Boeing rival.

In the video, Forgeard and Humbert tried to anticipate and respond to the major questions swirling around the A350.

Forgeard, known for his provocative wit, came out with his own version of history of the rivalry with Boeing. He expressed annoyance with the conventional wisdom that the A350 is Airbus’ reaction to the 787’s success.

“You couldn’t say anything that irritates me more,” he said. “We owned the market of 250 to 300 seats. That had destroyed the career of the 767.

“So the 787 has been a reaction of Boeing to this kind of dominant position we have.”

Forgeard and Humbert also declared Airbus can finish the A380 super-jumbo program (now six months behind schedule), handle the A400M military cargo-jet program, and still deliver the A350 on time.

The go-ahead for the A350 had been expected at the Paris Air Show in June. Humbert said the delay in the launch was caused by a formal review to ensure the company had the necessary resources and to study specific hiring needs.

“We are now fully confident we can manage all these programs,” he said.

Not everyone was convinced Airbus can win this battle for the midsize-airliner market.

“Boeing really has put Airbus on the back foot for a change,” said Dan Solon, European analyst with aviation consultancy Avmark.

“My guess is Airbus will do decently well, but Boeing has scooped up a great breadth of commitments,” Solon said.

The 787 has won orders across a wide spectrum of customers.

“Airbus has an uphill struggle against the 787,” said Doug McVitie, a former senior salesman at Airbus and now managing director of France-based consulting firm Arran Aerospace. “Boeing has got the aircraft right for the market,” he said.

Still, if the Airbus sales team can turn in 200 firm orders by the end of the year — and if those orders look solid — that will go a long way to convince the doubters, and the 787 will have a formidable challenger.

In Paris, the A350 launch delay had been explained in part as a way to give more time to settle the trans-Atlantic dispute over aerospace-industry subsidies.

Boeing objects to European government loans financing new development programs. At its urging, the U.S. government last October unilaterally withdrew from a 1992 bilateral agreement that permitted the loans.

Airbus counters that Boeing gets indirect subsidies from defense projects, NASA funding and local incentives such as Washington state’s tax package to win the 787’s final-assembly work.

Yesterday, Forgeard insisted Airbus wants more loans for the A350 and that the European governments are ready to grant them.

But he said Airbus would hold off on them for a while, to encourage a settlement.

In his statement, Forgeard ignored the U.S. withdrawal from the 1992 agreement.

“We indeed applied for refundable loans as allowed by the 1992 agreement for the A350,” he said. “But in order not to provoke anybody … we shall refrain from drawing money in 2006.

“Of course, we expect our competitor to do the same, to refrain from drawing money … during the same period,” Forgeard added.

That condition was a non-starter for Boeing and the U.S. government.

“We take no comfort from any offer to postpone the actual payment of the launch aid these countries have already promised to provide,” said Christin Baker, spokeswoman for the U.S. Trade Representative.

“The announcement of their commitment to back the A350 will affect Airbus’ financing costs regardless of when they formally write the check.”

Boeing issued a statement demanding again a “permanent and complete end to launch aid.”

Dominic Gates: 206-464-2963 or dgates@seattletimes.com