Europe to agree A350 financing within a month

The four European countries that produce Airbus jets hope to agree on funding arrangements for the redesigned wide-body A350 XWB commercial jet within a month, France's transportation minister said Monday.

In a meeting with German and British ministers at the Paris Air Show, Dominique Bussereau said they failed to make a decision Monday because their Spanish counterpart was absent.

France would provide loans of euro1.4 billion ($1.94 billion), he said, and Peter Hintze, Germany's deputy economy minister, said his country will offer up to euro1.1 billion ($1.52 billion). Britain's Lord Drayson, minister for business and defense, declined to say how much Britain is willing to finance.

The three countries said in a statement that they "look forward to funding arrangements for the A350 XWB being finalized soon."

The wide-body aircraft is designed to compete with Boeing Co.'s hot-selling 787. Both models are more energy-efficient than aircraft flying today thanks to a greater use of composite carbon materials.

Airbus' program was set back when it was forced into a costly redesign after customers balked at an earlier version. The first flight is now scheduled for 2012.

Bussereau said the development costs of the program should be around euro11 billion, a figure Airbus spokesman Stefan Schaffrath declined to confirm. Governments could finance up to a third of the program costs in reimbursable loans.

Airbus parent company EADS had cash reserves of euro8.7 billion at the end of the first quarter, but has said preserving cash amid tight credit conditions is a priority.

Airbus and Boeing are locked in a dispute over alleged large commercial aircraft subsidies and are awaiting a ruling by the World Trade Organization.

The U.S. and EU have accused each other of providing billions in illegal subsidies to the companies. The U.S. says EU subsidies have enabled Airbus to capture long-standing Boeing customers. The EU counters that Boeing receives U.S. federal and state tax breaks, development funding and grants, as well as large amounts of military contract.