Airbus to challenge Boeing jet

AIRBUS plans to spend £2bn to make a high-tech 270-seater plane to compete against Boeing's Dreamliner 7E7, Financial Mail can reveal.

The announcement, expected in two weeks, will be a huge boost for BAE Systems, which has a 20% stake in Airbus, and Rolls-Royce, which will make the plane's high-efficiency engines.

The new plane from the European consortium will be called the A350 and will be based on the highly successful A330, but it will have a longer range. It will also have a new wing design and be built with more lightweight material.

The new Airbus will be slightly larger than the 7E7, a 218-seater due to be launched in 2008 after an investment of £4.5bn. But though the A350 is probably not as efficient, it is likely to be cheaper because it is based on an existing plane.

Airbus chief executive Noel Forgeard said: 'Performance would be better with a bigger plane of about 270 seats. We are discussing such a plane with a number of clients.'

Airbus refused to confirm that it was building such a plane, but will fly a party of journalists to its Toulouse headquarters next week to discuss its plans.