Continental Airlines on Wednesday said it became the first major US airline to order the Boeing 7E7, agreeing to buy 10 of the wide-body jets as a platform for growth on international routes.

The Houston-based airline said initial delivery of the 7E7s is scheduled for 2009 and it will lease another eight Boeing 757-300 aircraft starting next year.

"The 7E7 will be an important part of our international growth strategy," Gordon Bethune, Continental's chief executive, said in a statement.

Continental said it also agreed to speed up taking delivery of six Boeing 737-800 aircraft to 2006 from 2008. It said Boeing had agreed to provide backstop lease financing for those aircraft.

The agreements with Boeing are subject to several conditions, including the approval of Continental's board and, in the case of the 7E7 agreement, the negotiation of an engine supply arrangement that is acceptable to Continental.

Continental said it expects to finalize its previously announced USD$500 million in annual wage and benefit cost reductions by February 28, 2005, and believes it will receive approval from its board for the additional aircraft, provided that the company's business case for the aircraft includes a cost structure that will allow the aircraft to generate a positive return.

(Reuters)