Libya Orders Up To 20 Airbus Planes

July 18, 2006

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Libya returned to the global aviation market for the first time on a significant scale in almost 30 years on Tuesday with a deal to buy Airbus jets for USD$1.7 billion.

The move to buy European jets on behalf of Afriqiyah Airways is among the most significant non-oil deals since the lifting of UN sanctions in 2003 and Libya's first major plane order since 1978.

The United States last week extended a diplomatic thaw by authorizing aircraft exports to the North African nation but the first hard business went to Airbus.

"We want to have a strategic partnership with Europe to develop Africa in all its aspects: airlines, construction, tourism. Our aim is to develop across Africa," Bashir Saleh, chief of staff to Libyan leader Muammar Gaddafi said.

Saleh chairs the Libyan African Portfolio for Investment, which owns Afriqiyah Airways and which, he says, has a capital base of USD$5 billion to invest in achieving Gaddafi's vision of African economic and political co-operation.

"I hope we will develop good cooperation. One day you will see a big co-operation in a United States of Africa," he told a news conference, referring to a scheme for pan-African union championed by Gaddafi.

Afriqiyah signed a memorandum of understanding at the Farnborough International Airshow near London to buy up to 14 single-aisle medium-haul A320 planes, which seat 150 people, and up to six wide-body A330 planes, which can carry 253 people over longer distances.

"It is the first large aircraft order in 30 years after many years of embargoes and sanctions on Libya," Afriqiyah CEO Abdallah Sabri Shadi said. "It is definitely a big boost and a new start to aviation and transport businesses in Libya and I think we will see more demand from new operators for Airbus or Boeing."

The United States lifted restrictions on air transport cooperation with Libya, including aircraft sales, a Libyan official said last week.

The move came after the highest-ranking US diplomat visited Libya to reflect the changes in relations between the two countries, which have warmed since Libya gave up its weapons of mass destruction programs in 2003.

Libyan officials have said their country looked forward to US investment, high-technology and expertise.

They cited plans to buy several aircraft, upgrade ports and airports as areas of cooperation and trade with Washington.

Airbus said Afriqiyah planned to buy planes from its A320 series, including six A320s and three A319s, with options on a further five A319s.

Afriqiyah also plans to buy three A330-200 planes and has an option to buy three more, Airbus said.

The jets are potentially worth up to USD$1.9 billion at list prices but Airbus put a price tag of USD$1.7 billion on the deal.

Deliveries will start in 2007.

(Reuters)