The deal could cost Penerbangan Malaysia Bhd (PMB) between US$1-1.5 billion depending on the furnishing, with each plane costing US$170-250 million, the Star said yesterday.

Delivery of the first four A380s was expected to begin in 2006, with PMB having an option to buy two more at a later date, sources familiar with the deal told the newspaper.

The 555-seater aircraft would be leased to the Malaysia Airline System (MAS), which would use them for long-haul and high-demand routes.

"It is a good arrangement Airbus has offered PMB and MAS. It is even willing to offer PMB launch prices," a source said.

The A380, with its bigger capacity and a lower operational costs, would enable MAS to cut costs and to reduce airfares in the future, the source added.

Officials from MAS and PMB, which emerged as the holding company for the ailing national carrier after a major restructuring last year, were unavailable for comment.

But Prime Minister Mahathir Mohamad, who is also finance minister, had indicated in October the government was seriously considering acquiring new aircraft including the A380, for the ailing carrier.

The Star said the move was to ensure that MAS was not left out of the competition when the A380 entered commercial operation in 2006.

It also said MAS would probably buy about 20 of the A380 aircraft.

(China Daily January 8, 2003)