Paramount Airways has entered into a deal with Airbus Industrie to buy 10 A321 aircrafts for $1.5 billion. The Madurai-based company is planning to operate international flights to destinations in the Middle East, Africa, West Asia, South East Asia and Far East. The deal will be funded by the European Central Bank.

Commenting on the deal, Paramount managing director M Thiagarajan said, ''These overseas destinations will only have first class and business class, a model similar to our domestic operation,'' The first aircraft will be delivered in the fourth quarter of 2010 and the deliveries are expected to be completed within 12-14 months.

The memorandum was signed on the sidelines of the 48th Le Bourget air show in Paris.

According to Airbus vice president (sales) Miranda Mills, the deal also includes an option to buy 10 additional aircrafts. Paramount currently operates with five Embraer airplanes.

According to the aviation guidelines, airlines are allowed to operate international flights after completing five years of services and with a fleet of at least 20 airplanes. Paramount would fulfill these criteria by the next year. ''We would complete five years of operation next year. By then we would also have a fleet size of more than 20 aircraft,'' Thiagarajan said.

''This agreement marks a strategic landmark in our expansion plans and in particular to our goal to become a leading international carrier. The A-321 will help us realise these goals and we are happy with our choice of aircraft,'' Thiagarajan said.

The aircrafts would be equipped with two passenger classes - first class with full flat beds and business class with extra facilities.

''We are delighted to welcome Paramount Airways as a new customer. Their decision to go with the A-321 is a testament to the aircraft's leading position in this sector and also the partnership between our two companies which we hope will develop long into the future,'' said John Leahy, Airbus chief operating officer (customers).

"The A-321s will help us realise our ambitious and attainable goals and we are delighted with our aircraft choice," Thiagarajan said.    

Paramount had first launched operations in the domestic market in October 2005 with an all-business class.