After ordering ATR72-600s, Air New Zealand looks for synergies with Virgin Australia

Having ordered, subject to contract finalisation, seven ATR72-600s with options on an additional five in order to fuel significant domestic regional expansion, Air New Zealand is now considering what synergies it can achieve with fellow ATR operator Virgin Australia, who it has a 20% stake in.

"We are the largest ATR operator in the region so it does give us the opportunity to clearly propose to other operators opportunities where they could leverage or benefit from our scale and infrastructure. We'll certainly be exploring those alongside ATR, who also has been very helpful in assisting to facilitate those conversations and relationships," ANZ CEO Rob Fyfe says in Auckland.

"We'll be looking to share whatever resources we can – be they engineering resources, be they simulators, those kind of capital-intensive infrastructure," group general manager short-haul airlines Bruce Parton says. ANZ is also looking to acquire a new simulator to support its introduction of the ATR72-600.

While ANZ's subsidiaries operate 11 ATR72-500s, the -600 features an all-new glass cockpit. "Clearly we need -600 technology," Mr Parton says. ANZ last year introduced a CAE ATR72-500 simulator, which other airlines can use at the carrier's Aviation Institute. ANZ launched the Institute to help recoup its training costs (including flying, engineering, in-flight service, ground operations and business leadership) which would otherwise increase significantly if the carrier used facilities in other, more far-flung parts of the world.

Virgin Australia this week commenced its first ATR operations, and while its ATR72-500s and forthcoming ATR72-600s are operated by Perth-based Skywest, Virgin Australia envisions one day operating its regional fleet by itself without Skywest, according to sources familiar with the matter. Contentions between Skywest CEO Mark Shelton and Virgin Australia CEO John Borghetti over how and where the aircraft should be deployed are understood to be the main source of disagreement. Virgin Australia is understood to have partnered with Skywest only because it did not have the experience or resources, particularly with regional pilots, to launch the ATR operation on its own.

ANZ's ATR72-600s will be delivered from Oct-2012.

ANZ bought an initial stake in Virgin Australia in Jan-2011. In Sep-2011 it increased its stake from 14.99% to 19.99%. ANZ says the stake is a sign of its confidence in trans-Tasman business partner Virgin Australia, a way to extend its reach without aircraft capital investments and to fend off other carriers from potentially taking a stake in Virgin Australia.

Virgin Australia on 17-Oct-2011 launched ATR services with a 72-500 operation from Brisbane to Gladstone, a new route for the carrier. Today ATRs started on Brisbane-Port Macquarie and Sydney-Port Macquarie routes. The aircraft will expand to Sydney-Canberra and from January Brisbane-Emerald. Virgin Australia in Feb-2011 ordered four ATR72-500s, three of which have been delivered, four ATR72-600s and options on a further five ATR72-600s.