British Airways (BA) has embarked on a review of its long-haul fleet that will allow it to place orders within the next two to three years for aircraft worth billions of dollars.

The announcement will fire the starting gun for a race between Boeing and Airbus to become the leading aircraft supplier to one of the world's most influential carriers.

BA chairman Martin Broughton said that a paper would be presented to the airline's board within nine months. It would lay the foundations for the airline's biggest investment decision of the coming decade.

The issue will also be one of the major challenges facing Willie Walsh, chief executive-designate, who takes control from Sir Rod Eddington at the end of September.

Boeing supplies all 110 aircraft in BA's long-haul fleet, which comprises 57 747-400s, 43 777s and 10 767-300s. BA is the biggest single operator of the 747-400 and the second-largest operator of the 777, behind United Airlines of the US.

The review will be one of the most exhaustive examinations of new generations of aircraft being developed by Airbus and Boeing. These include the 555-seat Airbus A380 superjumbo, which is due to enter service for Singapore Airlines at the end of next year.

Mr Broughton said BA's options included Boeing's 787 Dreamliner, a long-range 250- seat mid-market aircraft due to enter service in 2008; the 747 Advanced, a stretched version of the 747-400 jumbo; and the 777-200LR, which will become the world's longest-range aircraft when it enters service early next year.

He said the Airbus A350, which the European group is developing as a rival to the 787, was unlikely to be a principal long-haul aircraft at BA.

On the A380, Mr Broughton said: "The jury is still out. None has been delivered yet. We don't have to make a decision just yet. We want to see them fly first. But they are very much on our radar screen."

BA's long-haul fleet is relatively young. The oldest 747-400 is 16 years old. Mr Broughton said BA would be reviewing its fleet strategy for the next 15 years.

The move signals the end, within the next couple of years, of BA's virtual freeze on capital expenditure, which has helped the airline to more than halve its debt level to £2.9 billion (€4.2 billion) from £6.6 billion at the end of 2001. - (Financial Times Service)