LONDON(Bloomberg) — British Airways, Europe's third-largest airline, will decide in September which planes to buy to replace aircraft in its long-haul fleet.The airline, which flies direct between Bermuda and London Gatwick, is considering planes from Airbus SAS and Boeing, chief executive officer Willie Walsh said in an interview in New York yesterday. It is "a great time" to discuss purchases because the manufacturers' planes are much improved, Walsh said.

British Airways has said it plans to order 34 aircraft to replace a mixture of Boeing 747s and 767s. The new planes must be 17 percent to 30 percent more fuel-efficient than the aircraft they replace, the airline said in May. The planes are needed as the carrier expands long-haul routes.

The airline is considering 787 Dreamliners and 747-800s from Chicago-based Boeing, and the A380 and A350 XWB aircraft made by Airbus, Walsh said. British Airways wants planes that significantly reduce noise and emissions, the carrier said in May.

Since US and European Union negotiators reached an "open-skies" accord in March, British Airways has said it will create a subsidiary to operate flights from US cities to continental Europe, "taking on the likes of Lufthansa, Air France and Alitalia on their own turf," Walsh said in May.

Services to Paris, Frankfurt, Amsterdam, Brussels and Milan are being considered, Walsh said in a speech to British American Business in New York.

The airline has submitted an application to the US Department of Transportation for permission to operate the routes by summer 2008 using Boeing 757s and 767s. Planes fitted solely with business-class cabins may be tried, Walsh reiterated today.

Frequencies on existing flights between London's Heathrow airport and the US may also be increased, Walsh said in May.

The airline's premium offerings performed strongly in recent months on trans-Atlantic flights, he said. "We see very strong demand," Walsh said. "We see no evidence of it slowing down in terms of bookings."

US carriers must consider a carbon trading system as customer sentiment on climate change alters, Walsh said in the speech.

"I would respectfully suggest to the US industry that it cannot turn its face against carbon trading forever," Walsh said. The US airline industry could be "left behind" if it does not change, he said.