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Airbus sees A320neo orders, sets goal for earlier model

An Airbus employee works in a fuselage section of an A320 Airbus airplane at the Airbus facility in Montoir-de-Bretagne near Saint-Nazaire J
An Airbus employee works in a fuselage section of an A320 Airbus airplane at the Airbus facility in Montoir-de-Bretagne near Saint-Nazaire J

ORLANDO, Florida (Reuters) - European planemaker Airbus hinted on Monday at imminent orders worth over $10 billion for A320neo passenger jets, saying cumulative orders for the revamped jet would probably hit 2,000 by the end of this month.

Airbus has so far sold 1,878 of the latest fuel-saving member of its single-aisle medium-haul jet family, which competes with the Boeing 737 in the largest part of the market.

Boeing outsold Airbus in 2012 for the first time in six years and remains ahead this year.

But Airbus has the advantage in fuel-saving medium-haul airliners that have taken the aviation world by storm and serve as a cash cow for producers.

At the same time, both manufacturers must ensure existing models continue to sell to prevent a dip in production and damage to their supply chains as they prepare to switch over to the new models from mid-decade - a period known as the "bridge".

"I think I can at least do 200," said commercial chief John Leahy, referring to the existing "A320ceo" model.

"It would be nice to get to 300, but at least 200," he said on the sidelines of the world's largest aviation finance conference in Florida.

"I think there is no problem with the bridge right now and A320ceo's are continuing to sell because it is a minimum change airplane. We are not changing the model, just the engines."

Airbus is awaiting confirmation of a tentative $2.8 billion order for 16 A320neo revamped aircraft from Hawaiian Airways, while industry sources say the two manufacturers are scrapping over a potentially rapid order from Indonesia's Lion Air.

In an interview, Leahy accused Boeing of using "aggressive" pricing in the crucial narrowbody segment of the market, where Airbus and Boeing compete for orders estimated at $2 trillion over the next 20 years at list prices.

The claim contrasts with recent suggestions that pricing had stabilized following a rough patch as planemakers fought to establish new versions of their best-selling models, the Airbus A320neo followed a year later by the Boeing 737 MAX.

"There is still very aggressive pricing as they attempt to claw back market share on the MAX," Leahy said.

Boeing Commercial Airplanes Chief Executive Ray Conner told analysts last week that the U.S. company had been forced to be "a little more aggressive" after entering the market late with a revamped 737 but that things were "in good shape now".

Both planemakers have accused the other of sparking a price war to defend or gain market share, which is split roughly evenly. Industry buyers say competition remains intense, fuelled partly by conflicting ambitions in their global sales battle.

Boeing officials have vowed to maintain 50 percent of the market, disrupting Airbus efforts to hold on to recent gains. Leahy said he expected to keep a share approaching 60 percent.

Leahy earlier also told the ISTAT aircraft financing conference that the wide-body A350, the planemaker's newest jet, would make its maiden flight in the summer but not necessarily in time for the June 17-21 Paris air show.

He vowed to stick with the A350-800, the smallest member of the mid-sized long-range jet, despite predictions from at least one customer, Qatar Airways, that the 270-seat model may be scrapped.

"We have no intention of doing that," Leahy said.

However he said sales teams had been urged to upgrade customers to larger and more profitable versions until production hits its stride towards the end of the decade.

Boeing is expected to offer for sale within weeks a revamped version of the 777, its top-selling wide-body jet, to compete with the largest new Airbus twinjet, the A350-1000.

Boeing Commercial Airplanes Marketing Vice-President Randy Tinseth said technology plans for the new mini-jumbo 777, expected to seat some 400 people, were coming together quickly.

The market for mini-jumbo jets is shaping up as the next important industry battle after the revamping of small models.

(Reporting by Tim Hepher and Karen Jacobs; Editing by David Cowell)

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