ATR awaits big Air NZ deal
By ROELAND van den BERGH - The Dominion Post | Monday, 31 March 2008
Regional aircraft maker ATR believes record fuel prices and lower domestic profits put it in the box seat to win a US$300 million (NZ$375 million) order from Air New Zealand.
The airline is evaluating a fleet of about 15 new ATR72-600 turboprops along with the Bombardier Q400X and the Embraer E-190 regional jet as a replacement for its existing 11 ATR72-500s.
Air New Zealand has delayed its decision on the purchase by two months till the end of May.
The French-built ATR boasts the most environmentally friendly credentials, burning less fuel, but is slower and smaller than the Q400X, a larger version of the Q300 Air New Zealand already has 23 of.
ATR's regional sales manager Laurent Negre said the environmental impact of a fleet was a key consideration for Air New Zealand.
Aircraft that used more fuel also produced more carbon emissions, which airlines would have to offset by buying carbon credits, potentially increasing the cost of fares.
"Having the most cost-efficient aircraft, and fuel-efficient aircraft in particular, certainly increases the gap versus other solutions," Mr Negre said.
Air New Zealand is positioning itself as a leader in the environmental debate and last it week launched a series of environmental initiatives, including a carbon offset scheme for passengers.
The airline is also considering the potential impact of increased domestic competition.
"It is a very important decision for Air New Zealand because the domestic market is very critical to New Zealand," Mr Negre said.
ATR had never been pushed off a route by a rival model, he said.
"It proves that it is quite a strong aircraft to have in your fleet when fuel prices are going up, when there is pressure on yields and on traffic possible from increased competition."
The E-190 was being considered if passengers were prepared to pay extra for the greater comfort of flying on a jet.
But though there were a few longer-distance domestic routes that would suit a jet, such as Auckland to Invercargill, the average route flown by the existing ATR fleet was only about 400 kilometres.
That was too short for jets to be used economically, Mr Negre said.
He conceded that Air New Zealand was keen to increase capacity, and the 68-seat ATR72-600 had 22 fewer seats than the Q400X and 36 fewer than the E-190.
But the potential arrival of more domestic competition could lead to network changes that favoured that ATR, he said.
ATR is trying to expand its presence in the South Pacific, and last year it opened a regional parts distribution centre in Auckland.