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Air NZ spends $270 million on new regional aircraft

Air New Zealand has ordered more ATR aircraft

In a boost to regional tourism, Air New Zealand has ordered seven new-generation ATR72-600 aircraft with purchase options for a further five worth a total list price of US$270 million.

Chief Executive Officer Rob Fyfe said the announcement, which is subject to contract signing, will significantly boost air service connections to regional New Zealand.

“This order potentially doubles the size of Air New Zealand’s ATR fleet and will put a further two million seats into the New Zealand regional market annually,” he said. “For our customers that will mean a big increase in the number of business timed seats and seriously cheap ‘grabaseat’ fares we have on regional routes every day.”

The first of the 68 seat ATR72-600 aircraft will be delivered to Air New Zealand in October 2012 followed by a second in December that year, two in 2013 and another each year for three years. The five purchase options are available for delivery between 2014 and 2016.

This follows Air New Zealand’s investment in 23 Q300 aircraft over the past six years worth more than NZ$450 million at list price and the purchase from lease of the majority of the existing ATR72-500 fleet over the past eighteen months.

“At a time when other businesses have shown little appetite to invest significantly in assets, particularly where revenue is derived from regional New Zealand, we have not waivered in our belief in the long-term strength of the domestic economy,” Fyfe said.

“Thanks to the purchase of larger aircraft and the lowering of fares we have seen regional passenger numbers increase by an average 5.6% annually since 2003, resulting in our regional airlines carrying 54% more passengers to 4.3 million in the year ended September.

“Today’s significant capital investment also signals that we will be upping our promotion of key regional centres at home and overseas as we will need to encourage even more people to fill those two million more seats coming on stream over the next few years.”

The new-generation ATR72-600 is the most efficient aircraft in its class and features a new cabin layout with larger overhead bins, improved seating and advanced cockpit technology including Required Navigation Performance (RNP) technology.

The introduction of RNP will further enhance Air New Zealand’s ability to maintain services during inclement weather to and from destinations like Queenstown, Rotorua and Wellington.

“The current ATR 72-500 – which sits alongside our Q300s and Beech 1900Ds – has been a core part of our regional operations since 1999 and has been a popular aircraft type with customers, serving 14 different domestic routes,” said Air New Zealand Group General Manager Australasia Airline Bruce Parton.

“The new ATR 72-600 aircraft will give us the means to up-gauge Q300 operated routes that will require more capacity in the coming years. In turn, this will release Q300 aircraft to up-gauge on some Beech 1900D operated routes, enabling us to look at start-up routes. So there is benefit in bringing in the larger turbo-props and cascading growth down throughout our regional operation.”

It is likely that some routes currently serviced by the smaller Q300, such as Nelson-Auckland and New Plymouth-Auckland, will see this larger turbo-prop in use.

“It is likely that the new fleet will be Auckland-based, providing us with an excellent spread of regional aircraft including bases in Christchurch, Nelson and Hamilton. This will give us a solid platform for regional growth particularly into and out of Auckland.”

“Air New Zealand is the largest operator of ATR Regional Aircraft in the Pacific market and we are very pleased to be able to help grow their fleet further,” said Filippo Bagnato, Chief Executive Officer of ATR.

“It is always exciting to secure a new customer for our aircraft. But it is an even greater endorsement of ATR when a major, world class airline that has been a long-term ATR customer returns to place new orders.

“They are the ideal aircraft for Air New Zealand’s next phase of domestic growth, and have a great reputation as the greenest turboprop airliner of its size in the market today.”

In related news, New Zealanders will be among the first people in the Southern Hemisphere to see the new Boeing 787 aircraft when Air New Zealand brings it to Auckland for the first time from 12-14 November.

Air New Zealand will host the Boeing 787-8 test aircraft at its engineering base at Auckland International Airport for two days. Exact timings of the 787’s arrival on Saturday 12 November non-stop from Seattle will be confirmed in the coming weeks, but will be timed to give Aucklanders the best chance of seeing the aircraft as it flies into Auckland.

“We’re looking forward to seeing the 787 in our skies for the first time. This is an aircraft which has the exciting environmental advantage of using up to 20 percent less fuel while also being able to carry up to 50 percent more cargo than other jet aircraft of comparative size,” said Air New Zealand Chief Executive Officer Rob Fyfe.

Air New Zealand is the launch customer for the larger 787-9 variant, which will have a greater range capability and seating capacity than the 787-8.

“Once the 787-9 goes into service sometime in 2014 it will change how New Zealanders fly and how we bring the world to New Zealand. Its composite structure enables better cabin humidity and lower relative cabin altitude for a more comfortable flying experience,” Fyfe said.

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