CFM International and International Aero Engines are squaring up for a major engine battle at Air New Zealand (ANZ), following the carrier's 4 July announcement of plans to acquire up to 35 Airbus A320 family aircraft.

The all-Boeing operator has decided to acquire Airbus aircraft for the first time. A key element in Airbus's victory was ANZ's desire to expand the capabilities of its engineering unit to include Airbus types to take advantage of available third-party work.

Deliveries of the initial batch of 15 aircraft are due between October 2003 and 2006, five of which will be leased from GE Capital Aviation Services (GECAS). The lease deal appears to hand an advantage to the GE/Snecma joint venture CFMI as the GECAS aircraft will almost certainly be equipped with CFM56s.

An engine selection is therefore outstanding for the remaining 10 orders and purchase rights on 20 aircraft. The airline has the right to switch its A320 commitments to the A319 or A321 before delivery.

The 10 aircraft on firm order, plus a simulator and spares, are being acquired "via a combination of purchase and leasing agreements still to be finally determined within a capital investment budget in excess of $400 million", says ANZ.

The A320s will replace ANZ's four Boeing 767-200ERs and nine of its 14 Boeing 737-300s on regional international routes. These aircraft are to be phased out between September 2003 and December 2006. Domestic routes will continue to be flown with 737s.

ANZ, which was renationalised earlier this year to save it from financial collapse, says the acquisition will not have a detrimental effect on its balance sheet because "financing will be secured against the aircraft".

Source: Flight International