* Boeing (NYSE:BA) in "no rush" to decide whether to launch jet - exec
* Chinese airlines pushing for more cargo space - industry source
* Demand for new jets rising with oil above $65 a barrel - exec (Recasts and adds executive comments)
By Jamie Freed
SYDNEY, June 3 (Reuters) - Boeing Co BA.N is prioritising passengers over cargo belly-space in its potential new mid-sized airplane, a senior executive said on Sunday, dampening speculation of a redesign to accommodate freight demand from Asian airlines.
Industry sources say the proposed 220 to 270 seat plane has been designed with an elliptical fuselage leaving less space for cargo in order to make it more aerodynamic and cheaper to fly.
But Chinese airlines in particular have expressed reservations about the proposal due to the growth of e-commerce in the world's second biggest economy, one senior industry executive has told Reuters, speaking on condition of anonymity.
Randy Tinseth, Boeing's vice president of marketing for commercial planes, said the company was reluctant to change the design because larger widebody jets were better suited for cargo.
"We don't want to overdesign an airplane just to carry belly cargo, especially when I can make an airplane that becomes more efficient delivering and carrying passengers," he told Reuters on the sidelines of a global airlines meeting.
Boeing has yet to decide whether to launch the new airplane, but Tinseth said it had held discussions with more than 50 airlines who "liked the efficiency" of the current design.
Boeing is still studying how to build the plane and how to lower the cost of production, putting a lid on expectations that the plane could be launched at next month's Farnborough Airshow.
"I would say we have time," Tinseth said. "We are in no rush to make a decision."
Boeing is expecting increased demand for new airplanes now that oil is above $65 a barrel.
"When you take a look at where the price of fuel is today ... it means replacement economics make more sense for our customers," Tinseth said.