More and New ATRs for Air New Zealand Link?

Air New Zealand is expected to spend hundreds of millions of dollars on more planes to lift capacity on key domestic routes and deter competitors from breaking its regional monopoly, in a deal to be announced today. Industry sources suggest that the more efficient and capable next-generation ATR 72-600 could be added to the fleet, allowing Air New Zealand to increase capacity on larger regional routes. House of Travel retail director Brent Thomas said additional 68-seat ATRs could add more flights to centres that lacked enough services. That would encourage more people to fly and potentially lead to lower fares, Thomas said. Regional fares were still seen as too high by many travellers, in some cases costing more than a flight to Australia, he said. The ATR-600 series promise greater comfort and luggage space, are more fuel efficient and boast the latest technology in the cockpit. Air New Zealand shelved a US$300 million (NZ$375m) plan for 15 larger turboprops to replace its fleet of 11 ATR 72-500s three years ago. Instead, it bought seven of the existing aircraft it had been leasing. At the time three options were considered: the French-made ATR 72-600, which is the newer version of the current 500 model; Canada's 74-seat Bombardier Q400, a bigger version of the Q300 flown by subsidiary Air Nelson; and Brazil's Embraer 70-seat E-170 regional jet. Centre for Aviation analyst Will Horton said: "The experience from Virgin Australia is that the ATR72's economics are better than the Q400." Air New Zealand owns nearly 20 per cent of Virgin Australia and the airlines have a strategic alliance on the Tasman. Analysts said expanding the fleet would be a defensive move against a potential competitor like Jetstar targeting Air New Zealand's monopoly on the regional network. The regional network was considered to be a profitable component of the airline's business, though it does not break the figures down in its financial accounts. The 72-500 fleet has a relatively young average age of about 10 years and is popular with passengers.

Source : http://www.stuff.co.nz/business/5810162/Air-NZ-tipped-to-spend-big