Airbus has launched two updated versions of its popular A330 widebody aircraft to offer better fuel efficiency as it competes against Boeing's rival 787 Dreamliner family.
The European manufacturer said the A330-800neo and A330-900neo, to be powered by Rolls-Royce Trent 7000 engines would reduce fuel consumption by 14 per cent per seat and allow for a range up to 400 nautical miles longer than the current A330 family.
The first deliveries of the A330neo will start in the fourth quarter of 2017.
Airbus Group chief executive Tom Enders said the A330 was a very important contributor to the company's earnings and one of its most reliable and efficient aircraft.
"With our decision to re-engine the plane, we will keep the A330 flying high for many more years to come," he said. "The development costs for the A330neo will be incurred from 2015 to 2017 with an impact of around -70 basis points on Airbus Group's 2015 return on sales target. However, we have a very good business case and the A330neo, once in service, will continue to significantly contribute to our group's earnings."
His comments came a month after Airbus executives appeared to talk down the prospects of an A330neo launch at a two-day media briefing in Toulouse.
Kiran Rao, Airbus's executive vice president strategy and marketing, last month said the older version of the A330 had a lower capital cost than the 787 and its engines were lighter and easier to maintain even if they burned more fuel.
"It is not a slam dunk decision [to build an A330neo]," he said at the time. "Airlines want to have the right price and they want the airplane to operate short-range missions."
He said for flights of two to three hours, it made more sense to operate an older A330 rather than a 787 or a then-proposed A330neo.
Qantas Airways, Virgin Australia Holdings and Jetstar all operate A330s. Qantas uses them for transcontinental and Asian flights, Virgin uses them for transcontinental flights and Jetstar for flights to Asia and Hawaii, although the budget carrier is returning its fleet of A330s to Qantas as it receives new 787s.
Leeham News and Comment editor Scott Hamilton said the A330neo was unlikely to be a true competitor to the 787.
"Based on advance information and data, we concluded the A330neo comes within 3 to 5 per cent of the 787 operating costs and Airbus can make up the difference with pricing the fully amortised A330 to a price point Boeing will have difficulty matching," he said.
Mr Hamilton added the 787 is sold out past 2020, so if airlines needed a new widebody aircraft before the 787 or A350 is available, it would make sense to buy an A330neo or the larger 777-300ER.
"Availability and price will really drive the success or failure of the A330neo," he said. "We think it will be a success."
So far this year, Boeing has outpaced Airbus in net aircraft orders.
The US aerospace giant said on Sunday it would launch an upgraded version of its 737 MAX airliner with new engines and more seats aimed at low-cost airlines. The plane would have around 200 seats in an economy-class configuration, CEO Ray Conner told journalists at the Farnborough Air Show in Britain.
The Boeing 737 MAX planes are a family of mid-range airliners with new more efficient engines that will compete with the new Airbus A320 Neo.
The new version will have 11 more seats than the current 737 MAX 8, after the addition of a door on either side of the fuselage to comply with evacuation regulations.
The original twin-jet 737 first entered service in 1968.
Boeing meanwhile said it had nothing to fear from a new version of the wide-body Airbus A330 that the European manufacturer may announce at Farnborough this week.