Air Zealand is planning to buy up to 12 planes at a cost of up to USD$270 million for its domestic fleet, the airline said on Wednesday.
Air NZ said it will buy seven new ATR72-600 planes from France's Aerospatiale with options on another five to upgrade its fleet used on short haul domestic routes.
The carrier, which has a near monopoly on most secondary domestic routes, currently uses ATR72-500 turboprop, Bombardier Q300, and Beechcraft 1900D planes on regional services.
It uses Boeing 737-300 and Airbus A320 aircraft on flights between the main cities, where it competes with Qantas budget offshoot JetStar.
Shares in Air NZ, nearly three-quarters owned by the New Zealand government, last traded up 1 percent at NZD$1.06.
On Tuesday the airline confirmed that it was pressing on with acquiring Boeing 787 Dreamliner planes, despite production delays which have seen its arrival delayed until 2014.