Wednesday, October 19, 2011

Air New Zealand to double regional fleet

Air New Zealand plans to add more than two million seats a year on its regional network over the next five years, promising more travel options and cheaper fares.

The airline yesterday confirmed that it would buy up to 12 new generation ATR 72-600 turboprop planes, more than doubling its existing ATR fleet.

The order for seven aircraft and an option for five more is worth about US$270 million [NZ$340m] at list prices, but airlines usually receive substantial discounts for fleet orders.

The first two aircraft will arrive in October and December next year, with the balance progressively delivered by 2016.

The five options, which appear likely to be taken up, were for delivery between 2014 and 2016.

Air New Zealand chief executive Rob Fyfe said the total order would boost air services to the regions by gradually adding two million seats a year to the market. That would provide a significant extra capacity at peak times and cheaper fares.

The new fleet was likely to be based in Auckland to cater for the regional growth to and from the city, with Nelson and New Plymouth high on the list for the first two planes.

But the new 68-seat ATRs would also be a regular feature at Wellington International Airport, which serves as a national hub.

A number of services from the capital to Nelson, Napier, Tauranga and Rotorua using smaller 50-seat Bombardier Q300s could all eventually be upgraded to an ATR.

Air New Zealand head of Australasian airlines Bruce Parton said such upgrading on high demand routes would free up the Q300s to take over services flown by the smaller 19-seat Beech 1900, which could in turn be used to open new links.

Andrew Dale, chief executive of travel agency APX, said the volume of extra seats planned would be good for regional fares.

"There is a phenomenal amount of regional demand," Dale said.

It was also good to see Air New Zealand enhancing its regional services even though it faced no competition on them, he said.

Fyfe said the airline's strategy of introducing larger planes and reducing fares had helped to drive an average 5.6 per cent increase in regional passenger numbers over the last six years. About 4.3 million regional passengers were carried in the year to September.

Air New Zealand would also increase its marketing of regional tourism here and in Australia to help fill the extra capacity.

Fyfe said the ATR72-600 was the most efficient aircraft in its class and featured a new cabin layout with larger overhead bins, improved seating and advanced cockpit technology, including precision navigation system to allow the plane to land under a lower cloud base in difficult airports such as Queenstown.

The existing 11-strong ATR72-500 fleet is operated by Christchurch-based subsidiary Mount Cook Airlines.

A decision on operating structure and financing of the new planes was still to be made, Fyfe said.

There was also the potential for more engineering jobs at its Nelson engineering base.

Order up

Air New Zealand has ordered up to 12 new ATR 72-600 regional planes.

Total list price value US$270m [NZ$340m] for 12 of the 68-seat high-wing turboprop.

Seven planes to be delivered between October 2012 and 2016

Options for another five planes for delivery between 2014 and 2016.

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