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Did French prime minister accidentally reveal big Airbus order?

Tim Hepher and Jean Décotte
Tuesday, 23 Oct 2012 | 6:41 PM ET

* Ayrault lists Asian A350, A380 prospects

* Aide says he was citing existing smaller deal

* Remarks come amid speculation of new order interest

* Boeing to meet airlines on large-jet needs

TOULOUSE, France, Oct 23 (Reuters) - Airbus parent EADS , whose merger talks with BAE Systems leaked to the press in the summer, may find more of its business subject to accidental early disclosure - this time by the French prime minister.

Jean-Marc Ayrault, who has just returned from Singapore and Philippines to help drum up business for French companies, told Airbus workers his trip had highlighted the importance of remaining competitive on world export markets.

But departing from a prepared speech for the opening of a new Airbus factory in southwest France, Ayrault then referred to billions of dollars of plane orders that did not appear to correspond to business already announced from those countries.

``I would like to add that during this trip, Airbus signed an order for 15 aircraft and took options for the A350 and possibly the A380,'' Ayrault told an audience of 1,000 staff and media.

The expressions of Airbus executives at the event gave nothing away, but aerospace industry watchers have said Singapore Airlines is among a number of top carriers seen as candidates to consider fresh orders for long-haul jets.

Such deals are sure to grab industry attention because a battle between Airbus and Boeing over the lucrative ``mini-jumbo'' market for large twin-engined jets has reached a crucial phase.

Airbus is looking to bag a high-profile endorsement for its A350-1000 long-range jet, while Boeing is pondering upgrades for its 777 airliner which is enjoying record sales.

During Ayrault's trip, Philippine Airlines confirmed an order for 10 Airbus A330 jets on top of a purchase in the summer. An official in the French prime minister's office said his comments alluded to this latest purchase ``and nothing else.''

An official government transcript of his comments confirmed the wider reference to potential A350 and A380 orders.

Airbus declined comment. Neither the Singapore nor Philippine carriers were immediately available for comment.

Ayrault was speaking as Airbus inaugurated a factory for the A350 in the latest chapter of its rivalry with U.S. planemaker Boeing.

Airbus hopes to boost sales of the A350-1000, the largest variant due to seat 350 people. A four-year drought ended when Hong Kong's Cathay Pacific placed an order for the airplane and upgraded 16 orders for smaller A350-900s in July.

Armed with Cathay's endorsement, Airbus is widely expected to target other standard-bearers including Singapore Airlines and major Western carriers that might be ripe for an upgrade to the larger model or a brand-new order. Singapore Airlines already has 20 A350-900s on order.

``They're big 777 users, and anything that indicated a pattern of 777-300ER migration towards the A350-1000 would be a big wake up call for Boeing,'' said analyst Richard Aboulafia.

The 777-3000ER is the most recent version of Boeing's most profitable aircraft and sells for $298 million apiece.

The A350-1000 is worth $321 million at list prices.

Airbus says the lightweight carbon-composite aircraft will beat the 777 on efficiency, but will not be available before late-decade. Airbus plans to increase output of the largest A350 to try to break Boeing's firm hold on the mini-jumbo market.

Influential aircraft lessor Steven Udvar-Hazy, founder of Air Lease Corp, urged Airbus to focus on this model.

``We are trying to persuade Airbus to de-emphasize the A350-800 in favour of the A350-1000,'' he told Reuters.

For its part, Boeing wants to persuade major customers like Singapore to keep ordering the current 777-300ER or else wait for a possible upgrade around the turn of the decade. Airlines such as Emirates have pressed it to firm up the design plans.

Airline sources say the U.S. planemaker is holding a summit of carriers next week to discuss their large-jet requirements.

Boeing declined to comment on the meeting.

``We schedule a series of meetings with customers to discuss twin-aisle airplanes, including our existing product line and future development options,'' a spokesman said by email.

``We are always talking with our customers about their fleet requirements, and per Boeing policy, do not discuss details''.

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