(Reuters) – As Airbus (AIR.PA) races through flight testing of its newest plane, the next-generation A350, Europe’s planemaker faces growing battles to secure a future for the A330, until now its only truly lucrative wide-body jet.

Twenty years after it entered service, the 250 to 300-seat jet has repeatedly been pronounced dead by rival Boeing (BA.N) but refuses to lie down, outliving its A340 sibling and surviving for now the arrival of lighter new jets like Boeing’s 787 and the A350.

But analysts say time is finally ticking on Airbus’s most profitable wide-body jet, despite a steady series of changes aimed at prolonging the end of its production cycle and with over 1,000 still in service.

Without a fresh burst of sales or a slowdown from current record production levels, they say, Airbus faces a sharp drop in deliveries from 2016 onwards, with the visible backlog of undelivered aircraft now worth just 26 months of production.

“The A330 had an amazing past five years, not only because of its merits, but because Boeing’s 787 was delayed,” said industry analyst Richard Aboulafia at Teal Group.

“But with the 787 hitting (its targeted) production of 10 aircraft per month, that is going to crowd the A330 out of the market space pretty quickly,” he added.

That leaves Airbus with a two-fold challenge. It must decide

how best to maintain a foothold in the 200 to 300-seat market, where it first developed jets more than 40 years ago and which Boeing later targeted in part with its 787 family.

The version of the A350 that Airbus originally hoped would defend that spot, the 270-seat A350-800, has sold poorly and is likely to remain sidelined compared to the 314-seat A350-900.

And with the A350 only gradually building up output until 2018, experts say Airbus faces a hole in revenue and cash flow as a gap opens between peak output of the A330 and that of the A350 -just as it also wrestles with a complex transition between versions of its other main cash cow, the A320.

Even though orders may not be as bleak as they appear, with some countries still to approve deals, Airbus has already started looking at ways of heading off any output gaps.

Last year it broke from a pattern of beefing up the A330 to fly further with more payload and announced a leaner Regional version to compete in the key Chinese domestic market.

Ostensibly the aircraft is the same, but its performance will be artificially capped to help save airlines save on maintenance and statutory bills like landing fees.

Such an aircraft would be a niche product aimed at countries with congested domestic markets like China and India.

Morphing the plane in a different direction, Airbus is also looking at the possibility of new engines to boost performance in its core activity of flying medium- and long-haul routes.

It has given itself until the end of the year to make a decision but could make a move at Farnborough Airshow in July.

SOURCE REUTERS, Read more..