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Airbus pushes for A330neo orders ahead of Farnborough Airshow

By Tim Hepher

PARIS (Reuters) - Airbus is sprinting to line up preliminary orders for a revamped version of its A330 jet and is on stand-by to make an announcement as early as next week's Farnborough Airshow, but no decision has been taken, people familiar with the matter said.

The keenly awaited launch of the so-called A330neo hinges on the response of airlines and lessors being courted just days before the July 14-20 event, but the planemaker appears to be close to winning at least two provisional buyers, they said.

Airbus Group's board has not so far given official authorization to start marketing the plane, but is ready to do so depending on the level of commitments.

Publicly, Airbus this week played down the prospect of an immediate launch in what was partly seen as an effort to insure itself against perceptions of a flop if no announcement came.

Additionally, the project poses complex issues of production and strategy, including a virtually certain decision to halt or slow development of the newer but poor-selling A350-800.

Behind the scenes, however, efforts have accelerated to line up orders ahead of an announcement that could be the main feature of the civil side of the world's largest air show.

As a backstop, the Airbus board could discuss the matter on the eve of its July 30 half-yearly results.

"I think the A330neo will be launched at Farnborough, and if not, it won't be long in coming," said a senior industry source.

Possible future clients include Delta Air Lines, which is shopping for as many as 50 jets, and AirAsia, which wants an A330 upgrade, as well as lessors that have expressed support such as CIT and Air Lease Corp.

However, Delta is widely considered most likely to weigh bids from Airbus and rival Boeing later this year.

NO DECISION

Reuters reported in June that Airbus was poised to launch the A330neo with Rolls-Royce as sole engine supplier, subject to approval from the Franco-German company's board.

It will be offered in two versions equivalent to the two existing 253-seat and 295-seat models and offer some 14-15 percent greater efficiency than the existing model.

Airbus said this week the chances were increasing that it would update its most popular wide-body jet, but it would not necessarily do so at the closely watched Farnborough Airshow.

The company declined further comment on Wednesday, but several sources reiterated no decision had yet been taken.

Airbus traditionally makes air show headlines but is aware of the pitfalls of launching without an order, having launched a regional version of the same airplane in China last year.

"If they do a launch it will be with a lot of fanfare and with orders of something like 50 to 100 aircraft," said a senior aircraft industry source.

"They will not want to have a low-profile launch and can afford to wait until later in the year." Beyond that, analysts say the window for action may be closing.

After a strong run of A330 orders while Boeing suffered delays in its revolutionary 787 Dreamliner, Airbus has fewer than two full years' worth of production left to deliver assuming it keeps going at its current record production rate.

To get an upgraded aircraft to market with new engines and wingtips in 2017 as it hopes, analysts say it must meet its pledge to decide this year whether to do the $2 billion project.

"It can be done, but it has to be with the right timing and at the right cost," a person familiar with the matter said.

(Reporting by Tim Hepher, editing by David Evans and Hugh Lawson)

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