Etihad, the Abu Dhabi-based airline, today placed the world's largest aircraft order worth $43 billion (£21.5 billion), despite fears that the aviation industry faces potentially catastrophic damage from sustained high oil prices.

The order, which was split between Boeing and Airbus, re-emphasised the emerging dominance of Middle Eastern airlines and comes after a $34 billion order from Dubai-based Emirates last year.

Analysts have given warning that the high cost of fuel has made the business models of many airlines unsustainable and more than two dozen carriers have collapsed. Many more are expected to face difficulties later this year and most airlines in the US and Europe are planning to cut flights to reduce their costs.

Given these difficulties, the scale of Etihad's order surprised many industry executives at the Farnborough Air Show, which started yesterday.

James Hogan, the chief executive of Etihad, said: "If you think we are bucking the trend then, the whole Middle East is doing the same."

Rapid economic growth in the Middle East, partly driven by the windfall from record oil prices, has resulted in a boom in regional and international travel. Gulf-based airlines are growing at a time when many Western carriers are struggling to survive.

Emirates has dominated recent air shows with enormous aircraft orders and Etihad and neighbouring Qatar are following its lead. Qatar is expected to announce a multi billion-dollar order on Tuesday, possibly for up to a dozen A380s superjumbos.

Etihad's order yesterday included firm purchases worth $11 billion from Airbus, including 10 double-decker A380s, 25 of the new A350, which will be powered by Rolls-Royce engines, and 20 smaller A320 aircraft. The airline also placed options for a further 10 A380s and 45 Airbus planes.

Etihad's firm orders with Boeing totalled $9 billion and included 35 787 Dreamliners and 10 777 with options for a further 50 aircraft.

Speculation at the Farnborough Air Show, where the order was announced, was that neighbourly rivalry between Etihad and Emirates had encouraged the Abu Dhabi carrier to push its order as high as possible.

Mr Hogan added: "It reflects the strength and pace of economic growth in the emirate and the integral role Etihad will play in Abu Dhabi's future.

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