Jetstar will buy International Aero Engines V2500 jet engines to power up to 90 Airbus A320s in a deal worth $3.5bn.

The agreement will include the purchase of 50 A320 family planes with options and purchase rights on up to 40 more aircraft.

The airline also signed a $2bn long-term aftermarket services agreement with IAE for the new engines and those already installed on 40 aircraft in its fleet in Australia and New Zealand, or for the Jetstar Asia fleet.

IAE is a multinational aero engine consortium partnered by Pratt & Whitney, Rolls-Royce, Japanese Aero Engines and MTU Aero Engines.