Airbus delivers first A350, rules out cancelling A380 project

[December 22, 2014]  TOULOUSE, France (Reuters) - European planemaker Airbus delivered its first A350 mid-sized jetliner to Qatar Airways on Monday and moved to end speculation about the future of its larger A380 superjumbo.

Airbus said it was on course to reach its production goals for the A350, a mid-sized jet designed to compete with the twin-engined Boeing 787 and 777 models.

Delivery of the A350 came 10 days later than originally planned after Qatar Airways had last-minute problems with one of the suppliers of "buyer furnished equipment" - items like seats and galleys that the airline buys directly from third parties.

The arrival of Airbus's newest jet, developed at a cost of 11 billion euros ($13.48 billion), brings the European planemaker face to face in the world's airports with Boeing's 787, as a new generation of carbon-composite passenger jets offers 25 percent fuel savings.

But its development has coincided with a decline in the sales of large four-engine jets like the Boeing 747 and Airbus's A380, the world's largest airliner with 525 seats.

Airbus Group Finance Director Harald Wilhelm triggered speculation over the future of the A380 earlier this month when he said it would break even through 2018, whether Airbus decided to upgrade or "discontinue" it.

Chief Executive Fabrice Bregier said the A380 needed a boost in sales but ruled out cancelling it as the jet was about to break even.

"The trend is in favor of the A380 and in this context the fact that we would have in mind internally at Airbus or Airbus Group that we would stop the A380 is just crazy," Bregier said at an A350 delivery ceremony.

"After all the efforts we have made - we are about to break even next year - we are about to be successful with this program ... so we will continue."

Qatar Airways Chief Executive Akbar Al Baker, who is taking delivery of the airline's fourth A380 as well as the new A350 this week, said he was happy with its performance and had no advice to offer Airbus on whether to upgrade it.

Bregier said Airbus was not only looking at whether to add new engines, but that there was potential to increase its capacity by stretching it in the "very longer term when the market requires".

Airbus and Boeing are the sole suppliers of wide-body jets on international markets, whose development is bankrolled by record output of smaller Boeing 737 and Airbus A320 jets.

Aggressive competition for high-volume sales of those jets was highlighted when Boeing announced a $6 billion order from Air China <601111.SS> during the A350 ceremony.

($1 = 0.8159 euros)

(Reporting by Tim Hepher; Editing by James Regan; Leigh Thomas)

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