Etihad wants to rival its UAE competitor Emirates

The deal includes four of Airbus's A380 super-sized planes and would expand Etihad's fleet from five planes to 29.

If Abu Dhabi-based Etihad takes up its option on a further 12 aircraft, the price could reach $7bn, Airbus said.

The contract eclipses the $3bn deal signed by Airbus' arch-rival Boeing on Monday with Emirates, Etihad's larger and older Dubai-based competitor.

Rivalry

Airbus was keen to trumpet the deal, which is the biggest so far signed at the Farnborough air show.

Although the 550-seat A380 will not make its first test flights till early net year, Airbus has now pre-sold more than 120 aircraft.

Of these, 45 are going to Emirates, along with the 13 Boeing 777s the carrier ordered on Monday.

Etihad is expecting its A380s in 2007, a year earlier than Boeing is expected to start delivering the jewel in its own crown, the B7E7 "Dreamliner".

According to the carrier's chief chairman, Dr Ahmed Bin Saif al Nahyan, this was a factor in the decision.

Emirates' flights out of Dubai dominate UAE aviation at present, and Etihad represents Abu Dhabi's attempt to take a bigger share of the UAE's tourism and travel business.