AIRSHOW-Airbus eyes decision soon on bigger A350 jet

* Airbus exec sees A350 decision within months

* Airbus pondering larger A350 to leapfrog Boeing (NYSE: BA - news) 777X

* Boeing says confident will maintain edge over Airbus (Recasts, adds quotes and background)

By Tim Hepher and Nadia Saleem

DUBAI, Nov 9 (Reuters) - Airbus gave its strongest signal yet on Monday that it plans to build a new A350 jet to compete with Boeing's 777X, setting the scene for the next round of a mini-jumbo contest between the world's largest planemakers.

Airbus sales chief John Leahy told Reuters the European planemaker planned to decide within "a couple of months" whether there was a market for an addition to its A350 family of long-range planes capable of leapfrogging the 406-seat 777-9, the first member of the 777X family to be developed.

Leahy was speaking at the Dubai Airshow where delegates were attempting to gauge Airbus's response after Boeing launched its 777X with record orders at the previous 2013 event.

Airbus's largest twin-engined model now is the 369-seat A350-100, which was designed to oust the 365-seat Boeing 777-300ER from a lucrative spot in the market.

Asked in an interview whether Airbus would make a bigger A350, Leahy said: "We don't know yet. If I had to bet, the larger part of the market will stay around the A350-1000 or 777-300ER size category.

"I think in the next couple of months we will know if we want to do something."

Airbus is not yet offering a specific design to airlines, but anything that it does decide to build would go beyond a mere defensive response to the 777X, he said.

"It (Other OTC: ITGL - news) would be sitting right on top of them with similar range and payload and substantially lower seat-mile costs," he said, referring to a key barometer for jetliner efficiency.

"But before putting our resources into that, we have got to determine if that is a big enough market. If the market (for) 40-50 more seats is large enough, we don't necessarily want to give that whole thing to Boeing."

He said any new plane would have "double-digit better" operating costs per seat than Boeing's in percentage terms.

AIRLINE MESSAGE

Leahy's remarks fell short of a commitment to build such a plane. But delegates said they sent a clear message to airlines weighing jet purchases that Airbus intends to be active in a key part of the market, rather than cede ground again to Boeing's 777 family.

A decision to add a new jet would be the latest twist in the A350's tortuous $15 billion development, which went through numerous shifts before entering service earlier this year.

Speaking to Reuters on Sunday, Airbus Chief Executive Fabrice Bregier did not rule out expanding the A350 family, saying Airbus would invest where needed..

Boeing officials insisted the new A350 would struggle against its most profitable long-haul franchise.

"How can their 'clean-sheet' airplane compete with the most successful wide body ever," said Boeing sales chief John Wojick.

"Our airplanes fly higher, faster and further and do it more efficiently ... and that will be true for the 777-9 versus anything they develop," he told Reuters in an interview.

Boeing has more than 300 orders for 777X jets.

Its launch was widely seen as clipping the wings of the A350, which was partly aimed at ending a monopoly enjoyed by Boeing at the very top end of the twin-engine jetliner market.

Industry sources have said Airbus is studying adding a jet with more than 400 seats that would be powered by the next generation of Rolls-Royce engines.

However, in a sign that any new plane would need to be carefully marketed to avoid upstaging the existing A350-1000, Leahy denied reports it would be called 'A350-1100'.

"There is nothing called the A350-1100 and I wouldn't call anything the 1100," he said.

In an otherwise relatively quiet air show overshadowed by low oil prices and conflict in the Middle East, India's Jet Airways said it was the buyer of 75 Boeing 737 MAX jets in an $8 billion deal that had previously been unidentified. (Additional reporting by Sam Wilkin, Katie Paul, Andrea Shalal and Stanley Carvalho; editing by William Maclean and David Clarke (Toronto: CKI.TO - news) )