PARIS/DUBAI (Reuters) - Boeing (BA.N) looks ready to start offering its long-awaited next-generation mini-jumbo in weeks after pondering for months how to prevent a key part of the big-jet market slipping to rival Airbus EAD.PA.
Industry sources, analysts and potential buyers say Boeing's idea of revamping its long-serving 777 was rapidly gathering momentum even before British Airways (ICAG.L) signed a $6 billion order for 18 of Airbus's new A350-1000 jets on Monday.
Airbus's victorious climax to a three-year courtship cracks Boeing's virtually complete hold on BA's long-haul fleet and makes it almost certain the U.S. group will show its hand by formally offering a revamped "777X" very soon, the sources said.
Boeing's response would mark the end of a "phoney war" between transatlantic rivals and set up a direct clash for a segment of the market projected to involve 2,000 twin-engined mini-jumbo jets worth $500 billion at list prices over 20 years.
It provides a glimpse of fierce competition that continued behind the scenes - pulling in top Boeing executives - even as the grounding of its 787 Dreamliner over battery concerns captured global headlines and drew public support from Airbus.
"I think there is pressure on Boeing to move by the (June 17-21) Paris air show," said Adam Pilarski, former chief economist at Douglas Aircraft, which is now part of Boeing.
For years, Boeing governed a "sweet spot" in the jet market between 300 and 400 seats after pioneering two engines rather than four for long routes. Its 777 is an industry best-seller.
Now, its dominance is being challenged by the A350-1000, a larger cousin to Europe's answer to the carbon-composite 787, forcing Boeing to come up with changes such as folding wingtips to increase wingspan while fitting at the same airport gates.
"I think Boeing is ready to go with the 777X. We've been in fairly close contact with them in the last few months," Tim Clark, President of Emirates airline, told Reuters last week in Dubai.
"They have offered (it) to us in the specifications we asked for and this is now being tested through our normal route of assessment. If we are happy we may even go with it soon."
As head of the largest 777 operator with up to 175 jets that will need replacing starting soon, Clark is someone Boeing will pay attention to as he pushes for early decisions.
Not all potential buyers agree things will happen imminently, however. One, who asked not to be named, said Boeing needed more time to fine-tune the 777X, though basic negotiations can start while designs are still in flux.
Boeing must also consider the impact on its existing product, but is anxious not to leave the door open to Airbus. It declined to comment on the timing of a formal marketing debut.
"It is a thorough process, with ongoing robust discussions, to ensure we come to market with the right airplane, at the right time, leveraging the right technology and delivering the right economics," Boeing spokeswoman Karen Crabtree said.
Critics say Boeing has dithered over the 777X, giving Airbus time to recover from a slow start, as they became absorbed in a battle for market share for smaller planes. Still, Airbus has so far only dented the mini-jumbo market with 128 new A350-1000 sales, compared with 1,294 777s of various sizes over 20 years.
"Airbus's best friend is Boeing's delays with the 777X," said Richard Aboulafia of Virginia-based consultancy Teal Group.
The looming mini-jumbo war is part of a wider contest for long-haul, twin-aisle jets where Boeing is traditionally strong. The battle for 350-400 seats promises to be one of the toughest.
Boeing says the total market for twin-aisle wide-body planes is worth $2.1 trillion over 20 years. It represents a quarter of the overall jet market by volume but just under half by value.
Sources say Boeing is also offering a larger 787 called the 787-10X after a low-key decision to market it late last year. But so far no airlines have committed to the 320-seat model.
The largest version of Boeing's revamped 777 is tipped to have over 400 seats or 60 more than the A350-1000, raising questions whether Airbus will kick back with a bigger design.
So far, Airbus argues the 350-seat A350-1000 is "lean and mean" and that the 777X would be too big for many airlines.
"Airbus will respond that the A350-1000 will do the job," said Clark, adding the two planemakers had perhaps inadvertently arrived at a neat method of segmentation of the market.
Asked if Airbus would make the A350 bigger, the European planemaker's sales chief John Leahy told Reuters: "No, we wouldn't want to. There isn't a market there (and) you can't artificially create a market where there isn't one."
That doesn't prevent a growing number of people speculating that Airbus may keep other ideas in reserve, though it is seen unlikely to reconsider its A350 strategy any time soon.
Much depends on where the market decides the "sweet spot" should be - the ideal combination of payload and range that decides whether any plane is a success or an expensive flop.
Technically, industry sources say it would be feasible to make the A350 bigger, depending on the support of Rolls-Royce (RR.L) which has already redesigned the engine. Its battle with 777 supplier General Electric (GE.N) mirrors the jet makers.
Like bigger cars, stretched jets can be economical because they burn less fuel per passenger. But stretching too much increases the risk of the tail scraping the ground on take-off, so designers have to include bigger and heavier landing gear.
Drifting above 400 seats with a new, lightweight jet could also test support for Airbus's 525-seat A380 superjumbo.
"I think that would be a stretch too far," a major client of both Airbus and Boeing said, asking not to be named.
Despite its euphoria over BA - "one of the most dramatic changes of culture" at the airline since it turned its back on UK aircraft in the 1960s, according to analyst Howard Wheeldon - Airbus needs more wins as Boeing mounts an all-out 777 defence.
A decision by Swiss, an all-Airbus customer, to buy 777s - as its parent Lufthansa also weighs fleet options - suggests the opportunity to capture Boeing's lead remains tight, analyst say.
"That deal sent a signal to Toulouse," where Airbus is based, said a senior industry source, asking not to be named.
Additional reporting by Alwyn Scott in New York; Editing by Mark Potter