PARIS – The board of Airbus parent EADS approved the launch of the Airbus A350 XWB, the midsize jet designed to rival Boeing’s 787, the company said Friday.

In a statement, European Aeronautic Defence and Space Co. said funding would come “predominantly from the company cash flows” but gave no details. Its success would depend on implementation of cost-cutting plans at Airbus, EADS said.

The decision by the EADS board, meeting in Amsterdam, Netherlands, comes a week after shareholders called off an earlier board meeting amid a dispute over how the plane would be funded.

Friday’s statement did not say whether the program would draw on government funding. The European Union and the United States are already embroiled in World Trade Organization litigation over subsidies to Airbus and Boeing Co. A decision to fund the A350 XWB with state-guaranteed loans or launch aid – repayable only if the program turns a profit – could exacerbate the dispute.

Shares of EADS rose Friday on reports that the company’s main shareholders had agreed to launch the new plane – badly needed to fill a gap in the Airbus product line and stem a loss of business to Boeing. EADS stock closed 3 percent higher at $30.19 (American) in Paris before the announcement. Boeing shares rose $1.02 to close at $39.55 on the New York Stock Exchange.

After concentrating massive resources on its flagship A380 superjumbo, Airbus has been outmaneuvered by Boeing’s two-engine 787, which delivers better fuel economy than older four-engine Airbus jets in the same size category.

Boeing spokesman Peter Conte said the company remains confident that its 777 and 787 will dominate the market for midsize and large long-haul passenger jets over the next several years.

“The 777 is performing today, and the 787 will be available in 2008, at least five years before the A350,” Conte said. “Together the 787 and the 777 offer the most advanced, preferred available twin-aisle family – completely covering the market segment from 200 to 400 seats.”

EADS did not say when the A350 XWB will enter service or confirm its development cost, although co-chief executive Tom Enders has previously said the total program outlay will be close to $10.5 billion.