Why did Airbus launch the A320 before the four-engine A340?

The decision to work on the A320 instead of a four-engine aircraft proposed by the Germans created divisions within Airbus. The SA, or "single aisle," studies that later produced the A320 were developed to compete with the Boeing 737 and the Douglas DC-9 in the narrow-body single-aisle market. While that program moved forward, Airbus turned its attention back to the wide-body aircraft market.

North American operators clearly preferred a twinjet, while Asian operators wanted a four-engine aircraft, and opinion in Europe was divided. Most potential customers leaned toward the four-engine option, even though it was, under certain conditions, more expensive to operate than a twinjet. They liked that it could be relocated with one engine shut down and that it could fly "anywhere": ETOPS hadn't begun yet. Airbus gave the A340 four engines partly because no available engine had enough thrust for a twinjet of that size, and partly to avoid the ETOPS restrictions imposed on twinjets flying far from diversion airports. The aircraft carried four 151 kN (34,000 lbf) CFM56 engines instead of two high-thrust turbofans to sidestep those restrictions on transoceanic routes. In February 1985, TWA had flown the first commercial 120-minute ETOPS service, a Boeing 767 from Boston to Paris.

The A330 and A340 were launched jointly on 5 June 1987. To save development costs, it was decided that both would share the same wing and the same airframe, with an estimated saving of $500 million.