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Air New Zealand is likely to offer fewer Flights to regional New Zealand when it retires its loss making smallest Aircraft and replaces them larger models.
Last week, the national carrier said it was losing $1 million a month on routes served by its 19 seat Beech 1900D Aircraft.
To stem the red ink, Air New Zealand will axe services to Kaitaia, Whakatane and Westport from April.
It will also stop flying on some other routes including Wellington to Whangarei and Taupo, Palmerston North to Nelson and Hamilton to Auckland from February 2016. By August 2016, the fleet of 16 1900Ds would be decommissioned.
Routes previously served by the 1900Ds would be upgraded to larger and more comfortable 50-seat Bombardier Q300s of which Air New Zealand has 23.
Air New Zealand said the increased seating capacity provided by the Q300s as well as the arrival of additional 68-seat ATR-72 aircraft means fewer flights will be needed on some routes to move the same number of passengers.
Air New Zealand chief executive Christopher Luxon said flights between Timaru and Wellington, for example, would have to be reduced to allow for the increased capacity.
Timaru was likely to be served by a Q300 which carries more than twice the number of passengers per flight than the 1900D.
Air New Zealand operates a total of 36 one-way flights between Wellington and Timaru offering a total of 684 seats. Those seats can be provided by just 14 Q300 flights.
APX Travel chief executive Andrew Dale said it would be interesting to see how much Air New Zealand cut the frequency of services on routes which were getting bigger aircraft. Some businesses particularly government agencies would be hit hard by some of the route cuts, he said.
I know Air New Zealand are contacting corporate customers that are most affected by some of these changes,he said, adding that the larger Aircraft were a more comfortable experience for a traveller.
Air New Zealand has also ordered four more ATR72-600s worth $100 million to increase regional capacity. They will be added to five new ATR72-600s already in fleet, with four to come and 11 similar ATR72-500s.
Sydney based Centre for Aviation analyst Blake Moore said with the withdrawal of seven regional services, Air New Zealand should adequately manage its capacity requirements in coming years.
However, it could struggle to find a buyer for the 1900D fleet.
Moore said at between 12 and 15 years old, the Aircraft were among the youngest in the world and on average between $2m and $4m each although there's unlikely to be many suitors". The airline was the second largest operator of the type behind a US regional carrier. Forsyth Barr head of research Andy Bowley said the fleet could be worth up to $80m.
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