By Associated Press Writer
updated 1/12/2006 1:03:03 PM ET 2006-01-12T18:03:03

Italy's Air One will buy 30 Airbus A320 passenger jets for delivery by 2008 in a deal worth US$1.8 billion (euro1.5 billion) and plans to exercise an option to buy 10 more planes this year, the company said Thursday.

Air One, which has operated mainly in Italy where it has 25 percent of the market, has a fleet of 30 leased Boeing 737s, and the Airbus deal will allow it to gradually replace those planes with the new Airbus jets. The company also said it plans to launch new routes in Europe, but did not give a timeline.

The company is competing with flagship carrier Alitalia, which has long dominated the Italian market. In 2005 Air One carried 5.6 million passengers, and has carried 26 million people since the company was founded in 1995, officials said.

"In 10 years Air One has never weighed on the state budget, it has never received contributions, nor has it asked for any," Air One President Carlo Toto said at a news conference, a clear reference to struggling Alitalia, which is partly owned by the state. "And this for us is cause for great pride."

Toto said in a statement that the company decided on the deal with Airbus after a "rigorous and careful evaluation."

"The A320 will allow us to offer our customers the best comfort," Toto said, singling out increased room between seats. The Airbus A320 is a single-aisle plane that seats 150 passengers.

Air One said the deal includes an option to order as many as 60 more Airbus aircraft _ besides the initial 30 _ by 2010.

That figure includes the 10 planes the company plans to exercise the option to buy in 2006, Air One Chief Operating Officer Lino Bergonzi said on the sidelines of the news conference with Airbus executives.

He said the US$1.8 billion (euro1.5 billion) figure cited for the 30 that Air One had already agreed to buy was the list price, but he declined to say whether that was the exact price the company would pay.

Bergonzi said the new fleet would help reduce its operating costs and provide better service to customers. Patrick Trancu, a spokesman for Airbus in Italy, said replacing the 30 Boeings with 30 Airbuses would save Air One US$18.4 million (euro15.2 million) a year in fuel costs alone at current prices.

Airbus Chief Executive Gustav Humbert said in a statement that the "operating efficiency and the advanced technology that characterizes the A320 will contribute in the near future to the growth of Air One even on markets that are not now covered."

Officials said the new planes would have quiet engines with few emissions.

Christopher Buckley, head of Europe sales for Airbus, said Air One is the 44th company that has decided to switch to Airbus planes from Boeings.

Humbert called the latest deal "the start of a good partnership."

Humbert and an Airbus spokesman also said Airbus has been in talks with Alenia Aeronautica, which is part of Italy's Finmeccanica group, to build Airbus A350 passenger jets, and hopes to close a deal by mid-2006.

Air One runs frequent flights along the shuttle route between Rome and Milan. The company also flies between mainland Italy and the islands of Sicily and Sardinia. The airline has a code-sharing arrangement with Germany's Lufthansa.

Airbus is 80 percent owned by the Franco-German European Aeronautic Defence and Space Co.; Britain's BAE Systems PLC owns the rest.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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