The first of the new more fuel-efficient aircraft will join the Air New Zealand fleet in 2022, the rest arriving in intervals through 2027.

The airline says the new aircraft will reduce its annual carbon emissions by nearly 200,000 tonnes.

It will phase out its 777-200 by 2025. Featuring GE’s GEnx-1B engines, Air New Zealand’s says the new aircraft will be 25% more fuel efficient.

The airline says it has negotiated a “significant discount” on a US $2.7 billion list price.

The agreement also includes an option to increase the order to 20 and the right to modify the order for smaller 787-9 aircraft or a combination of the two, with a flexible delivery schedule that can be “delayed or accelerated according to market demand”.

Christopher Luxon, chief executive of Air New Zealand, described the deal as a “hugely important decision” for the airline.

“With the 787-10 offering almost 15% more space for customers and cargo than the 787-9, this investment creates the platform for our future strategic direction and opens up new opportunities to grow.”