More seats will equal lower prices

Tauranga will get more seats and lower fares from Air New Zealand's decision to buy 15 new planes for its regional services. Photo / File

Tauranga will get more seats and lower fares from Air New Zealand's $568 million decision to buy 15 new planes for its regional services.

Yesterday's announcement by the national carrier was welcomed by Tauranga's deputy mayor Kelvin Clout who said it would be a big boost for Bay travellers and lift domestic and overseas tourism.

The additional 15 ATR72-600 planes worth more than half a billion dollars will begin arriving late 2016, joining the 14 other ATR72-600s that will finish being delivered by the middle of next year.

Air New Zealand's decision to ratchet up competition in the regions comes just three weeks before rival Jetstar starts its regional services.

And although Jetstar has bypassed Tauranga, Mr Clout said it was a good strategic move by Air New Zealand to provide more seats and lower fares for its Tauranga services.

"Air New Zealand will be concerned that Jetstar could potentially come to Tauranga. By pro-actively lowering prices and increasing seats they are securing the market."

Mr Clout said introducing more of the 68-seat turbo props was good news for Tauranga. Driving times between Auckland and Tauranga were becoming slower and the new aircraft would make it more attractive to fly between the two cities.

"It will be a great boost for travellers, particularly business travellers."

Air New Zealand chief executive Christopher Luxon said the addition of 600,000 more seats on regional services would lower fares. Bigger planes were cheaper to run per seat and this allowed the airline flexibility to cut fares.

Tauranga Airport manager Ray Dumble said it looked like the new planes would replace the 50-seat Bombardier Q300 Dash 8 morning and evening services.

He was confident the extra seats would be filled. "It will be great for business travellers, and leisure travellers as well."

The 15 new planes will replace 11 older aircraft and fly on existing routes, with no plans to restore the Whakatane service axed last year.

Mr Luxon said the announcement was not in response to Jetstar's regional operation and Air New Zealand would fly where there was most demand.

In addition to ATR aircraft, Air New Zealand also operated 10 19-seat Beech 1900Ds - which it is phasing out - and 23 Bombardier Q300s.