Air New Zealand goes European for domestic jet upgrade

Tuesday 3rd November 2009

Air New Zealand is to replace its domestic Boeing Co. 737 aircraft with Airbus A320’s, taking advantage of the global airline slump to pick up planes at more favourable rates.

Subject to final contract, the first of 14 new Airbus A320 aircraft will arrive in early 2011 and progressively replace 15 Boeing 737-300 aircraft through until 2016, which coincides with the expiry of 737 aircraft leases. Air NZ has spent the past eight months evaluating replacement options for its 737-300s.

The total list price of the 14 new Airbuses is over US$1 billion, though Air NZ said it has obtained a discount that reflects current market conditions. The rights for the purchase of a further 11 aircraft have also been secured.

“This is a very good time to buy aircraft,” said Air NZ group general manager short haul airline Bruce Parton.

“The industry is at the bottom of a deep cycle so demand for aircraft is limited, creating favourable conditions for buyers with strong balance sheets like Air New Zealand. As we did with the 777, 787 and earlier A320 purchases, we have been able to buy counter-cyclically and again secure an excellent deal for Air New Zealand.”

The new A320s will be powered by an advanced version of the IAE V2500 engines currently fitted on the A320, which will be serviced at the Air NZ – Pratt and Whitney Christchurch Engine Centre joint venture, providing ongoing work for 400 staff employed there. Parton said the purchase will ensure that Air NZ continues to have one of the youngest fleets in the world.

“Thanks to its fuel efficiency, the A320 will enable Air New Zealand to increase capacity on the domestic market while reducing carbon emissions,” Parton said. “The larger aircraft will enable Air New Zealand to increase capacity on routes that are beginning to face capacity constraints at some airports during peak times.

The current 737 fleet is configured with 133 seats, with the larger domestic A320 aircraft likely to be configured at around 171 seats.”

While the A320 will provide a common single-aisle jet fleet for Air NZ, the domestic and short-haul international fleets will have different configurations.

More than 6,400 Airbus A320s have been sold to more than 300 worldwide customers and operators. Air NZ shares were trading at $1.27 today, down 1 cent on yesterday.

Businesswire.co.nz

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