South African Airways has opted to revamp its ageing fleet with Airbus planes, snubbing its former supplier Boeing.

The SAA order for 41 Airbus planes over the next ten years, announced on Thursday, has a catalogue price of about $3.5bn.

SAA's switch to Airbus comes at a time when Boeing, the world's biggest aircraft maker, is struggling to recover from the aviation industry meltdown that followed the 11 September attacks.

SAA had been expected to replace its 14 long-haul planes with Boeing aircraft, in a deal worth up to $1.5bn.

Boeing shares slid $1.38 to $48.48 on the news.

Haggling

The South African carrier does not at present have any Airbus aircraft in its fleet.

Airbus chief executive Andre Viljoen said SAA had negotiated "a highly competitive price" for the new fleet.

Airbus and Boeing are both believed to have slashed their catalogue prices in recent months in a bid to boost sales.

In January, the US aircraft maker said orders fell by 45% on the year in 2001 as airlines cut back on new orders.

The company saw its profits fall by $600m as a result of the post-11 September travel industry slump.

New order race

Airbus, a European consortium based in France, has been catching up on its larger rival in recent years.

So far this year, Airbus has received orders from Airbus and Virgin Atlantic.

In January, Boeing received an order for 100 new aircraft from Irish budget airline Ryanair, in a deal worth a face value of $9.1bn.

SAA, wholly owned by the South African government, said it had informed the country's Treasury of its purchase, in a sign that it may be planning to pay for the new planes through increased borrowing.

The company has not yet published full-year results for the period covering the World Trade Centre attacks.

SAA lost $66m before one-off costs in the year to March 2001.