RIO DE JANEIRO, June 7 (Reuters) - Ethiopian Airlines will

probably decide within the next three months on an order for 25

smaller commercial jets to expand its local network, CEO Mesfin

Tasew Bekele said late on Saturday during a gathering of airline

executives in Brazil.

Africa's largest carrier, which operates 147 aircraft, is

looking at the Airbus A220, Embraer E-2 and

the Boeing 737 MAX 7, which is expected to be certified

by the U.S. Federal Aviation Administration this year.

The planes would be used on both domestic routes and around

neighboring countries.

"There are some issues, but probably within a matter of

three months," Bekele said of the timing of a decision. Bekele

did not specify the issues.

The A220 programme remains in the red and has faced stiff

competition from Brazilian rival Embraer ( EMBJ ).

Like other carriers, Ethiopian Airlines has been wrestling

with higher fuel prices due to the war in Iran and it has cut

Middle East flights to meet lower passenger demand, such as

reducing frequency to Dubai from three flights to two a day, he

said.

System-wide the carrier is spending about 60% more on jet

fuel, although it has managed to resolve concerns over

shortages.

"We have addressed the supply issue. It is okay now," he

added on the sidelines of the International Air ​Transport

Association's (IATA) annual summit this weekend in Rio de

Janeiro. "But the price issue is a serious issue."