It has been rough time for Boeing Co of late. The 9/11 terrorist attacks sent the airline industry into a tailspin and reduced the demand for planes, while archrival Airbus SAS has increasingly been gaining ground. With the French company soon to become the world's top plane maker, the American aviation giant is banking on the popularity of a yet-to-be-approved plane to revive its sagging fortunes.

　　Boeing co, which by the year-end will be overtaken by Airbus SAS as the world's No 1 plane maker for the first time, may take years to regain the top slot as the European company accelerates its lead in orders and deliveries.

　　Boeing will introduce its first new plane in 2008 at the earliest, should the Chicago-based company decide later this year to build the Dreamliner, a twin-engine aircraft with at least 200 seats. Airbus has introduced new versions of two planes in the past two years. Its 555-seat A380 will fly in 2006 and has won commitments from 11 customers for 129 planes, Airbus has said.

　　Airbus, based in Toulouse, France, has said it will deliver 300 planes this year and may deliver as many as 315, according to internal plans, compared with 280 for Boeing. It has won new contracts for 238 aircraft versus 157 for Boeing. The US plane maker has proposed a half-dozen new planes since 1990, abandoning all because of a lack of demand.

　　"Airbus' fleet of planes is newer and more up-to-date," said Alan Beaney of Sevenoaks-based Principal Investment Management Ltd, which helps manage US million, including shares of BAE Systems Plc, which owns 20 percent of Airbus. A new plane from Boeing would add "a bit of competition," he said.

　　The dreamliner, also known as the 7E7, would have a range of about 12,200 kilometers. It's designed to replace aging Boeing 757s and 767s and compete against Airbus' twin-engine A330 series. It would be the first new Boeing jet on offer since the 777 in 1990.

　　"We are getting good reaction from the airline industry," said Boeing Chief Financial Officer Mike Sears at a briefing in London last week. "We expect by the end of this year to have board approval to offer the airplane."

　　If the Boeing board gives the go-ahead, the plane maker will try to get commitments to buy the plane from airlines early next year, then line up engine and parts manufacturers to invest in the project and share the risk.

　　Boeing hasn't said how much the project will cost or what it will charge for the planes. It has said new technologies will cut development and production expense. The Dreamliner is expected to use 15 percent to 20 percent less fuel than current models.

　　Paul nisbet, an analyst at JSA Research, figures the total development costs for Dreamliner at US billion to US billion. He said he expects Boeing itself to shoulder 50 to 60 percent of the total and get the balance from risk-sharing partners.

　　Nisbet, who has a "buy" rating on Boeing shares, says he expects Boeing to launch the plane and predicts Boeing shares will rise "into the 40s" once that happens. Shares traded recently around US.

　　"We have expressed an interest in the 7E7, but we're equally interested in the Airbus mid-range aircraft," said Karen Franklin, a spokeswoman for British Airways Plc, one of Europe's largest airlines. Talks with Boeing and Airbus are in "very initial stages," she said.

　　John leahy, Airbus's chief salesman, said he doesn't expect to see the 7E7 launch by year-end and that the plane would be no better than an existing Airbus product, the A330-200.

　　"I do believe that Boeing needs to do something to update the 767-300 and -400," Leahy said. "We've got about 85 percent of the market now compared to an airplane that used to dominate the market, but using today's technology, what Boeing will build will be an airplane that may be better than the 767, but that will be very similar to the A330-200."

　　The world's two largest commercial plane makers are developing different kinds of planes because of their divergent views on future demand for air travel. Boeing says future passengers will prefer not to travel through big airport hubs and transfer planes, so that a smaller plane like the Dreamliner, which would fly point-to-point routes, makes more sense.

　　The us plane maker sees demand for 2,000 to 3,000 planes the size of the Dreamliner over the "next few decades," including replacements for 757s and 767s. It forecasts demand for planes larger than 500 seats at just 320 planes. Airbus predicts demand for the A380s at 700 planes over 20 years, as airlines want to use scarce landing slots at hub airports to accommodate as many passengers as possible. The A380 will cost US billion to develop, with Airbus itself contributing half that figure.

　　Airbus plans to deliver 304 planes next year, according to internal planning documents obtained by Bloomberg News. Boeing is aiming for as many as 300, CFO Sears said in London. Airbus is down from a record 325 planes in 2001, when Boeing delivered 527.

　　Airbus through August had delivered 175 planes, compared with Boeing's 184. The European maker is expected to build more planes than its rival in the last three months of the year.

　　"We have adjusted our production down in these very difficult times, when airlines do not need airplanes, said Boeing Chief Executive Philip Condit at last week's US Arab Economic Forum in Detroit. "When times go back up, we'll take our production back up."

　　Airlines are still trying to climb out of the industry's worst slump ever, triggered by slowing economic growth in 2001 that slumped further after the September 11 terrorist attacks on the US. The Iraq war and the spread of severe acute respiratory syndrome, or SARS, further crimped demand this year.

　　The world's airlines lost a combined US billion in 2002 and US airlines alone will lose as much as US billion this year, according to the US Air Transport Association. European airlines may be profitable in 2003, with US airlines returning to profit only in 2004, said JP Morgan analyst Chris Avery.

　　Airbus' and Boeing's commercial aircraft businesses remain profitable. Airbus in 2002 reported profit before interest and tax of 1.36 billion euros, down 18 percent from a year earlier. Sales fell 5 percent to 19.5 billion euros.

　　Boeing's commercial plane business had operating profit of US.85 billion last year, 8.2 percent greater than in 2001, on US.4 billion in sales. Profit was boosted by 17,100 job cuts last year in anticipation of drop in orders after September 11.

　　Shares of Airbus parent European Aeronautic, Defense and Space Co have gained 37 percent so far this year to 13.50 euros. Boeing shares have risen 6 percent this year to US.

　　Airbus chief Executive Noel Forgeard and Boeing Commercial Airplanes group Chief Executive Alan Mulally have predicted plane deliveries will pick up in 2005.

　　Suppliers are less optimistic. At General Electric Co, the world's biggest maker of jet engines and lessor of airplanes, GE Aircraft Engines Chief Executive Dave Calhoun says production will increase only in late 2006 or early 2007.

　　"I think it's in the airframers' interest to promote a recovery and we understand that," Calhoun said in a meeting with executives and reporters. "Based on what we see in this economy, it's going to be a little longer."

　　Rockwell collins Inc Chief Executive Clayton Jones says figures from his company, which makes cockpit instruments for Boeing and Airbus planes, fall below the plane makers' forecast, though he expects airlines will return mothballed planes to their fleets next year as demand grows.

　　Worldwide air traffic is expected to grow 6 percent to 7 percent in both 2004 and 2005, Peter Morris, chief economist for the International Air Transport Association, said at an industry conference last week in Frankfurt, Germany.

　　Boeing, which is aiming to land orders for the Dreamliner as demand picks up, is talking to 50 airlines about the project. It says British Airways Plc and Singapore Airlines Ltd have expressed interest in the plane. Singapore will be the first customer for Airbus's A380.