Aer Lingus deal to buy 17 Airbus planes

Aer Lingus is to buy 17 aircraft from the Airbus Industrie SA in a multi-million pound deal.

The new A320 aircraft will be used in the carrier's shorter-haul European fleet, which is being expanded to fulfil 15 new possible routes over the next two years.

The destinations under consideration are understood to include Berlin, Dubrovnik, Athens, Krakow and Bilbao.

The Airbus deal involves purchasing seven of the aircraft outright and leasing the remaining 10 - as well as an option on a further 10 planes.

The new aircraft will start operating by the end of 2005 when Aer Lingus will no longer fly Boeings or British Aerospace aircraft in its fleet.

The Airbus contract will leave the airline's fleet at 27 A320's and seven long haul A330's by 2005.

The terms involve Aer Lingus selling seven of its 11 Boeings to International Leasing Finance Corporation in a cash deal to be concluded in January next year.

A buyer is still being sought for the remaining four Boeings. Six remaining British Aerospace aircraft are to be decommissioned at the end of next month.

Although the value of the deal has not been disclosed, the cash purchase of seven A320's - based on list prices - would cost around €349m.

But the deal, clinched after a contest between Airbus and Boeing, is believed to have incorporated a heavy discount dimension because of the current depressed state of the aviation industry.