Airbus signs deal worth US$7bln with Etihad

European aircraft maker Airbus announced Tuesday that it had signed a memorandum worth more than 7 billion US dollars with Etihad Airways, the national airline of the United Arab Emirates to supply 24 airplanes to the Abu Dhabi-based middle East company.

Etihad Airways ordered Airbus' widebody long-range aircraft and the new generation double-deck Airbus A380 for its future growth.

Airbus said the deal, the biggest announced so far at this week's Farnborough air show, includes options for Etihad to purchase four A380s and another 20 airplanes including four ultra-long range A340-500s, four A340-600s and 12 A330-200s.

Airbus is developing the A380 with some 550 seats, to fill the demand it sees for super-size planes carrying large numbers of passengers.

Airbus has now pre-sold 133 of the A380s and chief executive Noel Forgeard said the jumbo aircraft is on track to make its test flight during the first three months of next year.

The deal dwarfs a sale announcement made by Airbus's rival, American aircraft-maker Boeing Co., at the airshow Monday.

Boeing's deal with Emirates Airline consists of four 777-300ERs with options on nine more, for a total contract value of 2.96 billion dollars. The four planes are to be delivered in 2006, with the optional sales to be completed by 2012.

The two largest global aircraft makers Airbus and Boeing have been competing fiercely in the world market. The airbus A380 is the only modern aircraft design in the valuable 400-plus seat market, in which Airbus said it had already established a strong market leadership.

Boeing Commercial Airplanes chief executive Alan Mulally argued here that airlines need aircraft to make longer and more frequent flights and prefer flying point-to-point between final destinations rather than via congested hubs.

Boeing, headquartered in Chicago, is developing its new medium-sized 7E7 aircraft to meet this hoped-for demand.

The air show already has given executives of the two titans of the industry a platform for their intense competition as they defend their respective strategies for future growth and trade accusations about government subsidies.