Air New Zealand has ordered seven ATR 72-600 aircraft, with options for another five, to boost its domestic regional connections.
The first of the 68-seat turboprops will be delivered in October 2012, followed by a second in December that year, two in 2013 and one each year for three years after, said the Star Alliance carrier.
The purchase options can be exercised for delivery between 2014 and 2016, it added. The list price for the aircraft is $270 million, said Air New Zealand.
"This order potentially doubles the size of Air New Zealand's ATR fleet and will put a further two million seats into the New Zealand regional market annually," said the airline's CEO Rob Fyfe.
The new fleet of -600s will most likely be based in Auckland, adding to the aircraft operated by three subsidiaries in the existing regional bases of Christchurch, Nelson and Hamilton. said Air New Zealand.
Its subsidiary Eagle Air operates 18 Raytheon Beechcraft 1900Ds, Mount Cook Airline has 11 ATR 72-500s, and Air Nelson has 23 Bombardier Dash 8 Q300s.
The -600 features a new cabin layout with larger overhead bins, improved seating and a cockpit that includes Required Navigation Performance (RNP) technology.
RNP technology will enhance Air New Zealand's ability to continue services during bad weather to and from destinations such as Queenstown, Rotorua and Wellington, said the airline.
The aircraft will also allow it to replace existing aircraft and add capacity to some routes.
"The new ATR 72-600 aircraft will give us the means to up-gauge Q300 operated routes that will require more capacity in the coming years. In turn, this will release Q300 aircraft to up-gauge on some Beech 1900D operated routes, enabling us to look at start-up routes. So there is benefit in bringing in the larger turbo-props and cascading growth down throughout our regional operation," said Bruce Parton, Air New Zealand Group General Manager Australasia Airline.
The carrier said that the investment shows its belief in the long-term strength of the New Zealand economy.
Air New Zealand said that it has invested over NZ$450 million ($357 million) in the Q300s and the purchase from lease of the majority of its ATR 72-500 fleet over the past 18 months. Its regional passenger numbers have also increased by 5.6% annually since 2003 as it uses larger aircraft on these routes, it added.