CEO says Airbus is in a crisis

FARNBOROUGH, England -- Airbus scrambled to revive its sagging order book and credibility yesterday , disclosing a costly and ambitious revamp of its troubled A350 program to take on two of rival Boeing Co.'s best-selling jets.

More than three years after Chicago-based Boeing launched its long-range, fuel-efficient 787 Dreamliner, European rival Airbus increased investment in its own midsized plane to close to $10 billion.

``This is an entirely new design, without compromise, and using all the latest technology," new Airbus chief executive Christian Streiff told reporters on the first day of Britain's Farnborough Air Show, one of the biggest trade events in the aviation industry.

The previous version of the planned A350 had been billed as a rival to the 787, but had won just 100 firm orders -- compared with 360 for the Dreamliner. Airbus also fell behind on total order value last year as its larger A340 jet lost ground to Boeing's more efficient 777.

The new A350XWB -- for ``extra-wide body" -- will take on both the Dreamliner and the 777.

Airbus's customers had been increasingly vocal about their dissatisfaction with the previous A350 program. The company and its parent, European Aeronautic Defence and Space Co., suffered a further setback last month when they revealed a seven-month delay to the flagship A380 superjumbo.

``Yes, Airbus in the middle of a serious crisis in our relationship with our customers," Streiff said. ``Yes, this is something we are taking extremely seriously inside Airbus, and yes, we know the competition is taking advantage of this today."

In a surprise setback for Boeing, however, the plane maker appeared to jump the gun on a potential sale of 777s to Qatar Airways.

Boeing put out -- and then recalled -- a release disclosing an order for 20 of the jets valued at $4.9 billion shortly after Qatar canceled a scheduled news conference.

A Boeing spokesman, Peter Conte, later said that the order had been booked for several weeks to an unidentified customer, and that the order books would not be altered. `` The deal is done," he said.

But Qatar Airways said no contract had been signed with Boeing and it was in talks with both Boeing and Airbus about orders.

Airbus disclosed announced the sale of 10 A320 single-aisle jets to India's GoAir yesterday -- a deal worth about $700 million at list prices -- and Boeing said Indonesia's Lion Air had exercised an option to buy an additional 30 737-900 jets, with a catalog value of over $2.2 billion. LoadAir Cargo, a new air freight operation based in Kuwait, also said it had signed an order with Boeing for two 747-400 extended-range freighters.

Airbus won more orders than Boeing for a fifth straight year in 2005, but reported only 117 gross orders for the first half -- less than a quarter of Boeing's total.

Reactions to the A350 announcement were mixed. Experts said Airbus may struggle to meet its tight timetable, as well as to compete effectively against two Boeing planes with a single new platform.

But the cash and time invested in the superjumbo has left Airbus with little choice, said Richard Aboulafia, an analyst with US consulting firm Teal Group.

``They made their choice and committed their resources to the A380," Aboulafia said. ``Given that background, this is the best use of the resources that are left."