Airbus to launch stretched jet

Airbus Industrie is set to announce the launch of a $2bn programme to develop a stretched version of its A340 jet, possibly as early as today. The 375-seat aircraft will compete head on with some versions of the Boeing 747 jumbo jet and will enter service shortly after 2000.

A meeting of the Airbus supervisory board in Toulouse last Friday is understood to have agreed to proceed with the the new aircraft, the A340- 500/600 series, even though uncertainties remain over how British Aerospace will fund its share of the programme.

BAe, which holds a 20 per cent stake in Airbus, has applied for pounds 120m in launch aid from the Government for the new jet but has so far been refused. Airbus has already received more than 100 orders and commitments for the A340-500/600.