Air China said on Thursday it has agreed to buy 20 A330-200 aircraft from Airbus.

Air China said the list price for the planes was about USD$2.86 billion, but said the total consideration for the deal was lower.

The airline said the aircraft will be delivered between mid-2006 and the end of 2008. The deal, which has been approved by its parent China National Aviation Holding Co., will be funded through cash from the company's operations and commercial bank loans.

The new planes "will principally serve routes to international destinations in Europe, Australia, North America and certain key domestic destinations such as Lhasa," Air China said in a statement.

Airbus and rival Boeing are trying to tap into China's growth. Both aircraft makers are trying to sell the country their latest planes -- the Boeing 7E7 wide-body jet and the Airbus superjumbo A380.

Airbus CEO Noel Forgeard was quoted earlier this month as saying that China would probably buy the A380 soon, adding that he expected Air China to use the 555 seat double-decker jets for the 2008 Olympics in Beijing. Airbus is aiming to boost its share of China's commercial aviation market to 50 percent from a current 25 percent.

Boeing has predicted that China will become the world's second-largest commercial aviation market, behind the United States, within 20 years.

The company says China will need 2,300 planes over the next two decades as increasingly well-off Chinese take to the air.