SYDNEY - European aircraft giant Airbus on Thursday finalised a deal worth US$9.5 billion (S$12 billion) with Australia's Qantas for 110 A320 jets to expand into Asia, calling it the nation's single largest airplane order.

John Leahy, Airbus chief operating officer for customers, said Qantas had officially signed off on the order, which was flagged in August as part of the carrier's Asia-focused restructuring.

"The firm order for 78 A320neo and 32 A320s is the largest single order in Australian aviation history by aircraft units," Airbus said in a statement.

The next-generation A320neo burns 15 per cent less fuel than the original A320 and is a key part of France-based Airbus's growth plans.

Qantas CEO Alan Joyce said the deal would underpin the airline's plans to launch two new Asian brands, including a low-cost tie-up with Japan Airlines and Mitsubishi Corp and a separate joint-venture premium airline.

"The Airbus A320 will be the launch aircraft for Qantas' new premium airline based in Asia and will support Jetstar's expansion plans - including the establishment of Jetstar Japan," said Joyce.