Air New Zealand is increasing capacity on its flights from Auckland to Perth by 70 seats, to meet increased demand on both sides of the Tasman.

The airline, with alliance partner Virgin Australia, announced today it will replace its 234-seat Boeing 767-300 with a 304-seat Boeing 777-200ER from September 3 this year.

The 777-200ER will add 20% more seats to each flight, and introduce lie-flat Business Premier beds and Premium Economy to the route for the first time.

Demand for flights to and from Perth has grown significantly over the past 12 months, said Bruce Parton, Air New Zealand Group general manager Australasia.


Air New Zealand was prompted to review its schedule and capacity to better match "strong demand from travellers on both sides of the Tasman", Parton said.

"Western Australia is the fastest-growing economy in Australia and we've seen double-digit growth in visitor arrivals from Perth over the past year, with particularly strong growth over the past quarter."

Using a larger aircraft supported Virgin Australia's strategy of enhancing services to important corporate and leisure destinations, said Merren McArthur, executive of Alliances Network and Yield.

"As part of the repositioning of Virgin Australia, one of our key focuses has been ensuring that the growing Perth market is adequately served with appropriate capacity and a first-rate product for business travellers," McArthur said.

Air New Zealand's 777-200ER and Virgin's new Airbus 330 would give travellers the option of lie-flat beds from Sydney, Melbourne and Auckland into Perth, accompanied by premium Business Class service, she said.

Air New Zealand carried 30,000 customers from Perth to Auckland last year, with more than 80 per cent coming to New Zealand for leisure.