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The two B757s have spent more than a year undergoing modifications and an upgrade at Mobile Aerospace Engineering in Mobile, Alabama - one part of a multi-billion dollar investment in Defence by this government.

"The increased capability of these 757s will provide a significant boost to the Air Force," Phil Goff said.

"They have a greater range and payload capacity than the 727s they replaced. The modifications mean they can carry troops and equipment to and from deployments, transfer freight to humanitarian missions, combine freight and passenger loads, transport VIPs, and be used for medical and non combatant evacuations from the world's trouble spots.

"The modifications include upgraded civil communication, navigation and surveillance/air traffic management systems to meet future global air traffic control requirements, military communications capabilities, the installation of a cargo door, internal access air stairs, strengthened floors, and engine thrust improvement.

"The aircraft will conduct Introduction into Service activities over the coming months including training.

"The second of the RNZAF's Boeing 757 aircraft will complete its upgrade at Mobile Aerospace Engineering and Boeing Integrated Defence Systems in Wichita, Kansas towards the end of the year. Both modified 757 aircraft will be fully operational and available from early 2009.

"There is also good progress on life extension and upgrade projects for the Air Force's C-130 Hercules fleet of P-3 Orion fleet, with the first of the C-130s expected home by the end of the year and the first of the P3s in the second half of 2009," Phil Goff said.

"At a cost of $221 million to modify the 757s, $234 million to upgrade the C-130's and $352 million the P3s, this represents a significant investment in RNZAF capabilities. It follows an outlay of more than $900 million in the past 12 months for eight NH-90 medium utility helicopters and five Agusta-Westland A109LUH helicopters and a flight simulator.

"The combination of this investment provides the Air Force with state of the art equipment which will serve New Zealand well for decades to come," Phil Goff said.

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