Latin American aviation giant LAN Airlines S.A. will buy 20 eco-friendly Airbus A320neo passenger jets as part of its strategy to consolidate passenger and cargo customer base in the region.

LAN, said to be the 10th oldest airline in operation, has expanded services beyond South and Central America and now poses competition to airlines in North America, Europe and the South Pacific.

Chilean President Sebastian Pinera was a major shareholder in LAN but surrendered ownership when he took office last year.

The $1.7 billion Airbus order was a welcome boost to the European aircraft manufacturer but also a reminder to competing airlines in the Americas that LAN was poised to poach more of their business with a rapidly modernizing fleet and regional growth in travel. LAN has one of the youngest airline fleets in the world.

The airline's partnership strategy has given it a strong foothold in a growing number of destinations worldwide.

LAN subsidiaries and shareholdings include LAN Cargo and LAN Express, with 99.4 percent stake in both, Aerolinhas Brasileiras at 73.3 percent, LAN Peru at 70 percent, LAN Dominicana at 49 percent, LAN Ecuador at 45 percent), LAN Argentina at 49 percent), MasAir at 39.5 percent and Florida West International Airways at 25 percent. LAN has headquarters at Santiago's main airport and employs about 15,460 people worldwide.

LAN announced the purchase of the new additions to its fleet during the Paris Air Show, an official statement said.

Agreements for the purchase were signed during the air show and provide for the delivery of a total of 20 A320neo Airbus aircraft in 2017 and 2018.

"This order solidifies LAN's continuous commitment to provide customers with the most modern technology in aviation thanks to the A320neo's significant improvements to fuel efficiency and range capabilities," said LAN Airlines' Chief Operating Officer Ignacio Cueto.

He said the addition of the new jets was "an important step in ensuring LAN's leadership in the region."

The A320neo is an improved version of the existing Airbus A320 family. Airbus Industrie says the aircraft incorporates new, more-efficient engines and large "Sharklet" wingtip devices that together produce about 15 percent in fuel savings and other benefits.

Airbus introduced the innovative winglet design in 2009 to enhance the payload-range performance of the A320 Family. Offered as a retrofit option, Sharklets promised a reduced fuel burn of at least 3.5 percent over longer sectors, corresponding to an annual carbon dioxide reduction of around 700 tonnes per aircraft. The A320 is the first model to be fitted with Sharklets.

Both Airbus and LAN assert the A320neo was highly efficient in fuel consumption and allowed a substantial reduction in emissions, and decreased noise levels.

LAN and its affiliates serve more than 76 destinations around the world, operating 123 passenger aircraft and a fleet of 14 freighters.

LAN is designated in the business and finance industry as one of the few investment grade airlines in the world.