Air New Zealand said Wednesday it would purchase up to 12 aircraft from European manufacturer ATR, in a deal potentially worth US$270 million.

The carrier's chief executive Rob Fyfe said Air NZ had confirmed an order for seven ATR 72-600 turboprop aircraft from the Toulouse-based manufacturer and had the option to purchase an additional five.

Fyfe said the 68-seat aircraft, which will begin arriving in New Zealand from October next year, would be used to expand the airline's regional domestic services.

He said Air New Zealand's regional passenger numbers had grown 5.6 percent a year since 2003 and it expected the market segment to remain strong.

"Clearly this purchase of additional aircraft is testament to our belief that we will continue to see growth at those levels," he told reporters.

Fyfe said the new contract came on top of existing orders placed by Air New Zealand over the past decade to renew its fleet.

"Since 2001, we've placed orders for US$7.1 billion worth of aircraft, we've had US$3.8 billion of those delivered, with US$3.3 billion in the pipeline," he said.

The airline, which is 76 percent government owned, announced a 45 percent slump in annual earnings last August, as rising fuel prices and a strong New Zealand dollar weighed on its international operations.