Etihad will place orders for up to 100 jets, with a combination of narrow- and wide-bodied aircraft that could be split between Boeing and Airbus, some time this year, a top official said.
"Negotiations are in progress. The deal, involving 50 to 100 aircraft is currently in review process. We expect to place the orders sometime this year," James Hogan, Etihad Airway's chief executive officer, told Gulf News in an exclusive interview.
Etihad has a mixed fleet of 37 aircraft, heavily tilted towards Airbus - with 28 Airbus and six Boeing.
Six new aircraft are expected to join the fleet this year while current order book also includes 16 more that will take its fleet size to 53 by 2011.
Analysts believe the airline will have to place orders now for deliveries beyond 2012, failing to which might hamper its growth plans beyond that period as aircraft manufacturers have deliveries booked till 2016-17.
"We are talking to both the aircraft manufacturers, Boeing and Airbus. We are looking anywhere between 50 to 100 aircraft, to be delivered after 2012," Hogan said. Although he declined to give any definite numbers, he said: "The deal would be the biggest aircraft order in this year."
Although he did not specify any time frame, analysts predict this could happen during the Farnborough Airshow in July this year, as airlines usually announce large orders for airshow to benefit from the added attention.
He said the airline will use its own cash as well as bank finance for the purchase. He said the current tight credit conditions will not be an issue when his airline seeks finance.
He ruled out any further cash injection by the airline's shareholder, the Abu Dhabi government.
"We do not enjoy any sovereign guarantees and the deal will based on the airline's own merit," he said.
"We are running a business and have developed relationship with banks. Etihad enjoys good relations with the financial community. We have the capability."
At the end of 2007, the airline's aircraft financing deals aggregated to $1.4 billion.
Hogan, who successfully brought back Gulf Air into profitablity after years in the red in 2006 following a three-year turnaround programme, Project Falcon, joined Etihad in 2006. He immediately put a brake on the airline's near vertical growth curve in route expansion that saw the airline add a new route per month - taking it to 36 destinations in 36 months. The 53-month-old airline now serves 45 destinations.
Etihad will add Kozhikode, Chennai, Jaipur, Kolkata, Minsk, Moscow and Almaty to its destinations within the next 12 months, he said.
The airline is on course to break even by 2010, he said, as part of a three-year turnaround project to make the airline profitable.
"Although we are planning to add new routes like Moscow, Minsk, Almaty and some Indian destinations, our immediate objective is to consolidate the existing routes and promote them with additional frequencies," he said.
"Over the next three years, we plan to build these networks."
Etihad will add four more flights to Sydney in October to the existing daily frequencies. Hogan said the airline is looking at Melbourne and Perth to expand its gateway to Down Under within the next 12 to 24 months.
He said high fuel price remains his only major concern, which could result in an increase in fuel surcharge. "Fuel represents about 35 per cent of our operations. Increasing fuel surcharge could be an option for us. However, this will be guided by the national airlines in respective destinations."
The airline has hedged 70 per cent of fuel last year and for 2008.