AVIATION firm Boeing is to launch its first new jet design in 13 years as it fights back against European rival Airbus.

Boeing is pinning its future on a lighter, roomier, more fuel-efficient jet, the 7E7 Dreamliner,.

The announcement of plans to start selling the mid-size, 200-plus passenger jet capped a two-day meeting of the company's board of directors.

It comes only two weeks after a top-level shake-up following an ethics controversy and concerns about Boeing's direction.

Boeing will build the 7E7 at its Everett, Washington, plant. The plane will eventually come in three models and fly 200 to 250 people up to 8,300 miles non-stop.

The jet cannot be launched until the middle of next year, or enter the market before 2008.

But a decision to begin offering it for sale is an important landmark for a company that has been overtaken by Airbus in the plane-manufacturing business it had long ruled.

Using more composite materials than metal, the plane would weigh less and use 20 per cent less fuel than other models.

It would also have bigger windows and slightly wider aisles and seats than other planes. Boeing would sell the jet as a replacement for the 757 and 767, with greater range to handle long-distance routes.

* British Airways has lost its European Court appeal against a fine of nearly £5m for breaching EU rules on fair competition.

The fine was imposed in 1999 following complaints from Virgin Atlantic that BA's incentive schemes for travel agents made them more likely to push tickets on BA flights than on other airlines.

The European Court in Luxembourg agreed, stating: "The performance reward schemes used by British Airways to calculate travel agents' commissions constitutes an abuse of the dominant position held by BA on the UK market for air travel agency services."

Under the BA agreement travel agents were guaranteed performance bonuses based on sales growth in addition to basic commission.