Air Serbia has announced that ten next generation A320neo aircraft have been confirmed for its fleet.

The deal is valued at more than US$1 billion at list prices.

The deal for Air Serbia, unveiled at the Dubai Air Show, forms part of the major fleet order by its equity partner Etihad Airways, for up to 117 Airbus aircraft.

The A320neo will replace the eight A319 and two A320 aircraft, which are currently being leased in order to progressively retire the aging fleet of ten Boeing 737-300 aircraft.

The new A320neo aircraft are expected to be delivered between 2018 and 2020.

The Airbus A320neo announcement follows the inaugural flight of the first Air Serbia-liveried A319 from Belgrade to Abu Dhabi on October 26th.

The deal for Etihad Airways to acquire 49 per cent of Air Serbia and manage the airline under a five year management contract was announced on August 1st.

Dane Kondić, chief executive, Air Serbia, said the airline had a goal of being a world class airline and had moved rapidly to introduce the more modern Airbus A319s and A320s in order to immediately improve the travelling experience of its guests.

“The new fleet of Airbus A320neo aircraft is a key part of the strategy to re-position the airline as best in class with the most modern and comfortable single aisle aircraft. These aircraft will offer our guests the best cabin in the sky.

“With these A320neo aircraft we will set the benchmark in both product and service excellence as we extend our network to more destinations across Europe,” Mr Kondić said.

The A320neo is offered as an option for the A320 Family and incorporates new, more efficient engines and large “Sharklet” wing tip devices, which together will deliver up to 15 percent in fuel savings.

At the end of October 2013, firm orders for the NEO stood at 2,487 from 44 customers, making it the fastest selling commercial airliner ever and underlining its market leadership position.