A320 purchase leverages bad times 

Source: ONE NewsBruce Parton

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Air New Zealand short haul manager Bruce Parton has described the company's discount on 14 new Airbus planes as a "great commercial deal" that has taken advantage of the economic downturn.

Air New Zealand on Tuesday announced it would buy 14 A320 aircraft to replace its domestic 737-300 fleet. Though the price was not revealed, the company received a discount on the more than $US1 billion ($NZ1.39 billion) list price.

Parton says the A320s come with a range of benefits, and not just for passenger business.

"They've got containerisation which is really good for our cargo business, (it) allows us to quickly set the cargo business up and get it out," he says.

Air New Zealand, which has other Airbus aircraft, says the deal will help achieve further cost efficiencies through standardisation.

"We fly A320s across the Tasman and the Pacific and this in effect to have one fleet from the perspective of engineering and training," Parton says.

The first of the new aircraft is due to arrive in January 2011, with three more expected to be delivered that year. Parton says the arrivals will provide additional capacity for the Rugby World Cup which starts in September, and will be timed with an expected rebound in the air travel market.

The remaining 10 planes will be delivered by 2016 when Air New Zealand's leases expire on its 737-300 fleet.

Parton says while there are benefits to having a young fleet via maintenance savings, the purchase was more a case of taking advantage of a great deal.

"We were in a position where we didn't have to cut this deal. Over the next five years we needed to replace these aircraft so this really was an opportunistic time for us, a little bit similar to what we did with the 777-300s, the 787s.

"We've used the downturn in the market to pick up assets at a relatively cheap place," he says.

Both Europe's Airbus and the US's Boeing are heading for a sharp drop in orders this year, according to Reuters.

Air New Zealand has an option to buy a further 11 A320s for the same price with an agreed escalation.

The company also has four twin-engine Boeing 787 dreamliner planes on order.

Air New Zealand expects to take delivery of these planes in 2013.

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