MANILA (Reuters) - The Philippines' largest budget airline, Cebu Air Inc (>> Cebu Air Inc), said on Tuesday it has placed an order for 16 ATR 72-600 aircraft from European turboprop plane maker ATR, with an option to acquire 10 more, in a deal worth $673 million (432 million pounds).

Deliveries of the new aircraft, part of the airline's fleet renewal programme, will start in the third quarter of 2016, Cebu Air said. The carrier said as part of the renewal plan it will retire its eight ATR 72-500 aircraft.

ATR, an Airbus (>> Airbus Group) and Finmeccanica (>> Finmeccanica SpA) joint venture, earlier announced it had won 46 firm orders and 35 options worth a total of $1.98 billion at the Paris air show.

The order allows Cebu Air to service more small cities and islands in the Philippine archipelago and double its turboprop fleet size, company president Lance Gokongwei said. The budget carrier has been operating ATR aircraft since 2008.

Cebu Air, a unit of Philippine conglomerate JG Summit Holdings Inc (>> JG Summit Holdings, Inc.), operates 55 aircraft including 10 Airbus A319s, 31 Airbus A320s, and six Airbus A330s.

Between this year and 2021, Cebu Pacific will take delivery of seven brand-new Airbus A320 and 30 Airbus A321neo aircraft, as part of a $3.8 billion deal signed in 2011 aimed at upgrading to more fuel-efficient jets.

To date, around 330 ATRs, including more than 100 ATR 72-600s are currently operated by 55 airlines in the Asia-Pacific region.

(Editing by Sunil Nair and Kenneth Maxwell)

By Neil Jerome Morales