Boeing has outwon competitor Airbus when it secured a $6.5 billion order placement from Air Canada for 61 narrow-body aircraft.

The Canadian airline firm added the purchase order can grow up to as many as 109 as the company targets to replace its older Airbus and Embraer aircraft and replace it with a new fleet over the next ten years.

The agreement between Air Canada and Boeing stipulates firm orders for 33 737 MAX 8 and 28 737 MAX 9 aircraft, with substitution rights between them as well as for the 737 MAX 7 aircraft.

It likewise provides for options for 18 aircraft and rights to purchase an additional 30.

"Renewal of our North American narrowbody fleet with more fuel efficient aircraft is a key element of our continuing cost transformation program," Calin Rovinescu, Air Canada CEO, said on Wednesday.

The acquisition of the new planes, Mr Rovinescu said, will enable Air Canada to lower its fuel and maintenance expenses.

"Our narrowbody fleet renewal program is expected to yield significant cost savings."

"We have estimated that the projected fuel burn and maintenance cost savings on a per seat basis of greater than 20 per cent will generate an estimated CASM reduction of approximately 10 per cent as compared to our existing narrowbody fleet."

Deliveries will be made on a staggered basis, beginning 2017 with 2 aircraft. The next 16 aircraft will be in 2018 and 18 aircraft in 2019.

Sixteen aircraft are scheduled to be delivered in 2020 and 9 aircraft in 2021. All are subject to deferral and acceleration rights.

Air Canada, among the world's 20 largest airlines, flies to more than 175 destinations.