Pakistan International Airlines (PIA) has agreed to lease seven new Airbus aircraft from Kuwait's Aviation Lease and Finance Company (Alafco), the national flag carrier said.

The aircraft will replace PIA's Boeing 737-300 fleet, which has served the airline for more than 20 years, PIA said in a statement. 

The deliveries are expected to start and be completed in 2009. PIA did not say how much the deal is worth.

The 146-seat planes will reduce the average age of PIA's fleet from 13 years to around 10. The airline has also recently replaced its Fokker fleet with ATR42-500s.

The deal comes as PIA tries to stem financial losses and recover from a ban in March on most of its aircraft from flying to the European Union on safety concerns.

The ban was lifted in June for specific 747s and A310s. The carrier's fleet of 777s remained authorised throughout.

PIA also plans to replace other aircraft, including A310s and 747s. Reuters