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Big Step Forward for Airbus Jet

The Boeing rival formally launches its A350 passenger jet program.
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The direct competitor to


(BA) - Get Free Report

planned 787 Dreamliner became official Thursday, when


formally launched its A350 passenger jet program.

The Toulouse, France-based airplane maker said its shareholders, the European Aeronautic Defence & Space Co. and BAE Systems, had signed off on the twin-aisle, fuel-efficient plane.

EADS also made a peace offering to the U.S. by saying the A350 program would get under way without funding from European governments, according to wire reports. So-called launch aid would remain on hold until 2007 as long as there was still hope of a settlement with the U.S. in a World Trade Organization dispute over airplane funding.

The U.S. Trade Representative's office reportedly rejected the offer as inadequate.

The U.S. has contended Airbus' launch aid -- which the European plane maker doesn't have to repay unless a program is successful -- gives it an unfair advantage over Chicago-based Boeing. The E.U. claims Boeing receives its own special subsidies in the form of state tax breaks and defense research grants.

Even though it just got approval for the A350, Airbus has been busy marketing the plane for some time and has already lined up 140 order commitments from nine airlines.

Both the A350 and the Boeing 787 are designed to make medium- to long-range flights carrying 200 to 300 passengers. Both use advanced, lightweight materials to improve fuel efficiency, a key selling point with airlines, which are struggling with historically high fuel costs.

Boeing shares finished Thursday up 88 cents, or 1.3%, at $67.93.