Air New Zealand (ANZ) will acquire 14 Airbus A320 aircraft to replace its 15 Boeing 737-300s.
It has also secured purchase rights for a further 11 A320s, says ANZ.
"Subject to final contract," the A320s arrive between 2011 and 2016 as the leases of ANZ's 737s expire. The carrier says that it secured the A320s at a "discount that reflects the current market conditions."
The A320s have 171 seats, versus 133 for its 737s, and will be operated on domestic routes.
The IAE V2500 engine will power the A320s, and will be serviced by a joint venture between ANZ and Pratt and Whitney.
"This is a very good time to buy aircraft," says ANZ general manager short haul airline Bruce Parton. "The industry is at the bottom of a deep cycle, so demand for aircraft is limited, creating favourable conditions for buyers with strong balance sheets like Air New Zealand."
ANZ already operates 12 A320s.