As part of the agreement Air New Zealand also has secured purchase rights for a further 11 aircraft.

"Subject to final contract, the first A320 aircraft will arrive in January 2011, with the fleet to be progressively introduced through until 2016 coinciding with the expiry of 737 aircraft leases," says Air New Zealand Group General Manager Short Haul Airline Bruce Parton.

The aircraft will be powered by an advanced version of the IAE V2500 engines currently fitted on the A320, allowing further fuel burn improvement.

The engines will be serviced at the joint venture Air New Zealand - Pratt and Whitney Christchurch Engine Centre, providing ongoing work for the 400 staff employed there.

At list prices, the cost of the 14 aircraft is in excess of US$1 billion, however Air New Zealand has secured the aircraft at a discount that reflects the current market conditions.

For the past eight months, Air New Zealand has been evaluating options to replace its 737-300s.

"This is a very good time to buy aircraft. 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," says Mr Parton.

"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.

"This is a very exciting time for Air New Zealand when you consider we will be introducing 777-300s, 787-9s and now also A320s into our fleet during the first half of the next decade. It will ensure the airline continues to have one of the youngest fleets in the world, and a world-beating product across the entire jet fleet."

Mr Parton says Air New Zealand's existing fleet of 12 A320 aircraft is performing well on the airline's short haul international network and moving to one single-aisle jet aircraft type across both domestic and short haul networks will deliver efficiencies in fuel burn, maintenance, training, spares holding and fleet management.

"Thanks to its fuel efficiency, the A320 will enable Air New Zealand to increase capacity on the domestic market while reducing carbon emissions," says Mr Parton.

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 to likely be configured at around 171 seats.

"While we will have one common single-aisle jet fleet, there will be separate configurations for the domestic and short haul international fleets, reflecting the different needs of customers on those routes," says Mr Parton.

More than 6,400 Airbus A320 Family aircraft have been sold to more than 300 customers and operators worldwide.


Ends

Issued by Air New Zealand Public Affairs ph +64 9 336 2761