AIRBUS FACES A340 DECISION AS DEADLINE LOOMS
The supervisory board of the
European consortium, <Airbus Industrie>, has begun a critical
meeting to review government funding and airline orders for its
proposed A340 long range jet, Airbus officials here said.
    Airbus insists it needs five airlines to firmly commit
themselves to the plane before going ahead with the project by
the month's end, the deadline for its launch.
    The plane, a four-engined widebodied jet, has so far only
been bought by one airline -- <Lufthansa>, which has placed 15
firm orders and 15 options for the plane.
    But while Air France has said it wants to buy seven of the
aircraft, it has not yet formally placed an order. Discussions
with up to a dozen other airlines have not yet resulted in
public commitments.
    Apart from a shortage of orders, Airbus also is facing an
uphill struggle persuading its member governments to fund the
2.5 billion dlr project, which involves not only the A340 but
its sister A330 aircraft, a twin engined, wide bodied medium
range jet with many identical components.
    The British government remains unconvinced that there will
be sufficient room in the world long range jet market.
    The West German government is also uncommitted, and is
currently pressing for a restructuring of the consortium's West
German company, <Deutsche Airbus GmbH>, while only the French
government appears to be fully behind the program.
    Another major factor delaying a final decision on the plane
has been the engine which will power it. Airbus agreed last
October with <CFM International> that its CFM-56 engine with
28,600 lbs of thrust would power the plane. But in December,
Airbus announced an agreement with CFM rival <International
Aero Engine> (IAE) to power a slightly larger version of the
A340 with a 30,000 lb thrust high-technology superfan engine.
   Airbus has made clear to potential customers that the IAE
engine is now the principle engine for the project.  The
incorporation of the superfan engine made the plane on paper
more attractive to airlines, but the engine has yet to be
developed and CFM International had openly expressed scepticism
that the engine will be ready when the plane goes into service.
    The future of the Airbus consortium depends on the right
decision being made on the A340 in the next few weeks, for it
could find itself severely exposed in the 1990s either by
staying absent from the long range jet market or by committing
itself to a commercially unviable project.
 REUTER
