Air New Zealand invests in regional growth with commitment to purchase up to 12 ATR aircraft

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 says today’s 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. 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,” says Mr Fyfe.

“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,” says 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,” says 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.”