Air New Zealand has unveiled its new short haul aircraft, which it says will provide flexibility for more growth.

The Airbus A321neo will start commercial services next Friday on the ''robust'' trans-Tasman market.

The airline's chief revenue officer Cam Wallace said the stretched plane, with 214 seats - 46 more than an earlier version - was ideal for that market and the Pacific, where there are 240 flights a week.

''This is a critical aircraft for our future growth,'' he said.

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Air New Zealand is in a new tussle on Tasman routes with Virgin Australia, its former partner with which it has just split with after seven years.

Wallace said the new plane would help build a competitive advantage. The new aircraft have new Android-based inflight entertainment (IFE) systems in every seat, complete with fast chargers, more space in overhead bins and middle seats that were wider by 3cm.

''We're tremendously encouraged with where our bookings are at. We've added 10 per cent growth (in capacity) and revenue is matching our growth and - that's what you really want as an airline.''

He said he was pleasantly surprised with how robust the Tasman market is given extra capacity Air New Zealand and Virgin had put into it.

The A321neo (new engine option) has latest generation Pratt & Whitney geared turbo fan engine and with some aerodynamic tweaks and greater capacity, seat costs were estimated at 15 per cent lower than A320s used on short haul routes.

Air New Zealand is buying 13 Airbus neo aircraft (seven A321neos and six A320neos) to replace the A320 fleet that currently operates Tasman and Pacific Island services and a further seven Airbus A321neo for anticipated domestic network growth.

Wallace said the airline did have the option of switching A320s to A321s but he said the composition of the order looked right at this stage.

Some work was still being done on flight deck equipment ahead of the first passenger flight between Auckland and Brisbane next Friday.

The new aircraft gave his airline the opportunity to fly to new destinations in the future across the Tasman.

''In terms of Australia we think we're pretty connected and covered but you look at markets like Tasmania and think whether that's an opportunity for us.''

The airline assessed five to eight short-haul destinations at any one time.

Executive chairman of CAPA Centre for Aviation, Peter Harbison, said depending on how quickly the A321s are introduced, over time they provide a whole new layer of flexibility for airlines in their route planning options.

''They work fine on short haul of course, but because they can operate longer haul with a smaller load and higher efficiency, it does open up all sorts of new city pair possibilities, especially discretionary and seasonal routes where daily service isn't essential,'' he said.

''I'd really be looking up and down the Aussie east coast (across to Adelaide) for almost any town of over 50,000. If anchored at one end by a larger city, these become viable.''

Sean Berenson, Flight Centre NZ general manager product agreed the new plane, with extended range opened up other destinations.

''We may even see the efficiency and increase in capacity of the new craft open up other gateways, such as Western Australia, or the Northern Territory.''

Forsyth Barr head of research Andy Bowley said the new planes would enhance Air New Zealand's cost competitiveness on key routes with 25 per cent more seats and only a marginal increasing in variable operating costs.

''The financial benefit will be incremental rather than step change as only seven have been ordered relative to a fleet of 30 A320s currently,'' he said.

While the new planes have 46 more seats, they have the same number of toilets (three) as the airline's A320s. One is located two thirds of the way down the cabin of the new plane.

Wallace said this was done after studying how other airlines had configured their cabins and was done to cut queuing.

The new IFE also helped cut pressure on the bathrooms.

''One of the big differences we've seen since we've had inflight entertainment on every seat is that is that passengers are using the toilets less because they're more fixated with the entertainment,'' he said.

Pratt & Whitney engines on A321s had caused some problems and Air New Zealand had delayed taking delivery of their planes for a year.

Wallace said the airline had confidence in the engines.

''We're very confident about how this aircraft will perform.''