Air New Zealand is planning to buy 14 new Airbus A320s to replace its domestic fleet of Boeing 737s.
The new planes will begin arriving in January 2011 and will progressively replace the company's fifteen 737-300's as their leases expire.
The company's short haul airline general manager, Bruce Parton, says it is a good time to buy new aircraft because worldwide demand is limited.
He says under standard list prices the planes would cost more than $US1 billion but Air New Zealand has purchased them at a discounted rate because of the market conditions.
The company also has the rights to purchase another 11 aircraft.
Mr Parton says the new aircraft will be more fuel efficient and will increase capacity on domestic routes by 38 seats a flight.
Air New Zealand is already operating twelve A320s on Trans-Tasman flights and Mr Parton says operating the same aircraft on domestic routes will reduce fuel, maintenance and training costs.
