Wellington  - Air New Zealand announced Tuesday that it was buying 14 new Airbus A320 jets to replace its fleet of 15 Boeing 737-300s on domestic routes, with an option to buy 11 more.

The airline, which is 75.5-per-cent owned by the government, said it had secured the aircraft at a discount from the list price of more than 1 billion US dollars, reflecting current market conditions.

The first A320 planes are to arrive in January 2011, with the rest introduced progressively until 2016 when the last 737 leases expire.

The airline's short-haul group general manager, Bruce Parton, said the purchase would ensure the airline continued to have one of the youngest fleets in the world.

Air New Zealand already has 12 A320 aircraft operating on flights across the Tasman Sea to Australia.

Its long-haul international fleet includes seven Boeing 747-400s, eight B777-200ER planes with five later B777-300ERs on order and is awaiting delivery of eight Boeing 787s. (dpa)