Airbus said on Wednesday it would carry out further studies to find out whether its suppliers could cope before committing to a further increase of its A320 jetliner production, which is the mainstay of its revenues.

Airbus plans to increase its already record output from 36 to 40 planes a month and said in January it was thinking of expanding this to 42-44 a month as airlines exit recession.

A320 production is seen as the cash cow of the world's largest planemaker, as is 737 production for the number two Boeing, with both having a strong impact on revenues.

Sales chief John Leahy said on Wednesday Airbus Chief Executive Tom Enders had asked for more studies to be done to make sure supply chain is ready.

The production increase is designed partly to meet strong short-term demand as the EADS subsidiary attempts to win buyers for an upgraded A320 to be available from 2016.

The A320neo will have more modern engines which together with wingtip devices aim to save 15 percent in fuel costs.

Speaking at a press lunch in Paris, Leahy also predicted several hundred firm orders for the A320neo between now and the Paris air show in June.

Air Asia , a Malaysian low-cost carrier and major Airbus buyer, said this week it was thinking of placing an order for 175 aircraft which could include a bulk order for the neo.

Leahy accused Boeing of procrastinating over whether to follow Airbus in upgrading its competing 737 plane with new engines.

Boeing has said it is leaning toward redesigning the 737, the world's most sold aircraft, from scratch in about the year 2020, something analysts say would cost about $10 billion, or five to ten times the cost of an engine upgrade.

Leahy likened Boeing's plans to that of a previous aircraft called the 7J7 which the aircraft maker considered at a time of high oil prices and then abandoned.

I would suggest that is exactly what is going to happen again and after one or maybe two years of talking about a new plane... and losing deals my competitor will put a new engine option on the 737.

Boeing defended its decision-making process.

We are working hard with customers to establish the right way forward and we should be in a position to make a decision as to whether to re-engine the 737 or build a brand-new product some time around the middle of the year, a spokesman said. Those intensive discussions and studies are not yet complete.

A380 ORDER

Airbus and Boeing face pressure to deliver more fuel-efficient planes as oil prices stay high but are trying to outsmart each other on the timing and extent of the move.

Leahy also dismissed the threat from the CSeries passenger jet developed by Canada's Bombardier , saying there is no business case for the plane now that Airbus -- and in his opinion Boeing -- are set to offer more efficient engines.

The CSeries is designed to break into the 150-seat market dominated by the A320 and Boeing 737.

Leahy meanwhile said he was close to finalizing a $1.5 billion order for four A380 superjumbos from Japanese airline Skymark Airlines <9204.T>.

The order was provisionally announced in November and marks a breakthrough for the European planemaker in a Japanese market whose main national carriers remain loyal to Boeing .

The A380, the world's largest airliner, is designed for 525 passengers in three classes but can seat 840 people when its twin passenger decks are fitted throughout with economy seats.

Airbus has already sold a high-density no-frills version.

Airbus carried out evacuation tests to demonstrate passengers could get out of the plane quickly in emergency.

Leahy challenged Boeing to do the same with its just-premiered 747-8 jumbo jet, which can now seat over 400 people or as many as 580 in all-economy.

According to Leahy, Boeing will not have to perform such tests on the latest version of the 747 because approval is carried over or grandfathered from previous smaller versions.

I'm sorry, this is wrong, he said, adding however it was a decision of the safety authorities rather than Boeing.

A Boeing spokesman said the 747-8 will meet or surpass all legal requirements.

Airbus's next new plane, the mid-sized A350 which competes with the Boeing 787 Dreamliner, is on track, Leahy said.

The numbers are looking good and the program appears to be on track and we have taken a much more conservative approach, he said, referring to past Airbus output problems.

(Reporting by Tim Hepher, Cyril Altmeyer; Editing by Helen Massy-Beresford, Mike Nesbit)

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