WELLINGTON: Air New Zealand is expected to start replacing the Boeing 737-300s used on domestic routes in the next two years as the planes near the end of their service life.

Industry sources said Air NZ was looking to replace the 16 aircraft with bigger Airbus A320 and Boeing 737-800s, now flown by Pacific Blue and Jetstar, The Dominion Post reported today.

It was understood that Air NZ planned to replace the fleet with the same number of aircraft. Based on average list prices the total cost would be US$1.23 billion (NZ$2.2b), although airlines usually
get discounts for fleet orders.

Airline spokesman Mark Street said Airbus and Boeing had been asked for information on several aircraft options. A replacement decision would probably be made about the end of the year.

-AAP/NZPA