Airbus executives are voicing optimism that the company could decide by year-end to build an A350 passenger jet -- a potential threat to rival

Boeing's

(BA) - Get Report

planned 7E7 "Dreamliner."

Noel Forgeard, Airbus' chief executive, said he was optimistic Airbus' board would back a potential A350, which would be modified from Airbus' existing A330 wide-body jet, according to media reports. The board will discuss the project next week.

Earlier Tuesday, Airbus' chief commercial officer reportedly said he was hoping the company would be able to announce an A350 project by year-end.

An Airbus spokesperson for North America did not return phone calls seeking comment.

Boeing shares were off 39 cents, or 0.7%, at $53.58.

Airbus executives have been in discussions on a possible A350. Before Tuesday, officers had said a decision on the plane could come by the end of the year. Forgeard has said Airbus could spend as much as 3 billion euros (US $3.9 billion) on a competitor for the 7E7.

On Tuesday, however,

The Wall Street Journal

reported that Airbus had even bigger plans for the project, with a possible investment of as much as 3.5 billion euros (US $4.6 billion). Citing anonymous sources, the newspaper said the enhanced project would allow for new, more aerodynamic wings to improve speed and range.

Airbus is a joint venture of joint venture of European Aeronautic Defence and Space Co. and BAE Systems PLC.

Boeing's 7E7 is expected to go into commercial use in 2008. Boeing is designing the plane to be extremely efficient, and that will likely enhance its appeal for airlines, which are struggling with high fuel costs. The 7E7 is a midsize plane; Boeing opted on it instead of a super jumbo jetliner like Airbus' planned A380, a double-decker that will carry 555 passengers and is scheduled to go into service in 2006.