Airbus will overhaul its A320 jet to offer 15% more fuel efficiency.

Airbus will spend more than 1 billion euros ($1.3 billion) on the "A320neo" project, which will improve efficiency and reduce emissions, Reuters said.

The new plane will have upward-slanting wingtips and use engines from either Pratt& Whitney or CFM International. The company says it could sell as many as 4,000 of the planes over the next 15 years.

Airbus is struggling to hold on to its market share amid growing competition from companies such as Bombardier (BBD.D). Previously, Airbus had resisted changing its popular A320 design.

"This is not really a huge investment from Airbus. We are going to be spending a little over a billion euros on this program. We are not redesigning the A320," sales chief John Leahy said.

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Well, for Bombardier this is game, set and match. John Leahy of Airbus declared earlier this year that Airbus would re-engine its A-320 and demolish the Bombardier business plan for its C-Series aircraft. The airlines that rely on the Airbus A-320 in their fleets already have in place the infrastructures and personnel for scheduled maintenance, so why would they go to the trouble, time and expense to ramp up for the C-Series in these tough times? Factor in the advent of the new 100+ seater by COMAC of China, and Bombardier's potential market shrinks even more drastically. It was an unwise and untimely business decision on Bombardier's part - untimely because they should have gone forward in 2001, when it was first considered, rather than wait until 2006. They could have beaten competitors to the market with it, but not now. Potential customers will simply wait for Airbus to bring its A-320NEO to market in 2016, rather than gamble on an unknown which is new to even Bombardier.

December 01 2010 at 9:55 AM Report abuse rate up rate down Reply