Kuwait Airways Co. will order 25 planes from Airbus SAS in a $2.98 billion deal, a Kuwaiti newspaper reported Sunday.

The Daily Al-Watan cited sources close to the decision-makers as saying the state-run airline aims to upgrade its aging fleet by purchasing 10 new wide-bodied A350-900 planes and 15 of the slimmer A320neo jets from Airbus, the commercial division of European Aeronautic Defence and Space Company NV (EPA:EAD). The Kuwaiti carrier will start receiving the new aircraft by 2019.

The airline will also lease an additional 13 models from Airbus for six years as it takes its 11 existing A300s, A310s and A320s offline by the end of 2013. Sources said the decisions haven't yet been made public, but the lease component could value the whole deal at $4.4 billion at list prices.

"The sources made clear that the deal, which will be signed with Airbus very soon, is one contract that will include both the leased and purchased planes," the Daily Al-Watan said. Kuwait Airways may sign the agreement as early as this month.

The Boeing Company (NYSE:BA) also bid for the deal but Kuwait Airways considered the Airbus offer more attractive. Daily Al-Watan reported the carrier chose Airbus over Boeing partly because the cost was lower.