Air New Zealand is working with European planemaker ATR on hybrid electric aircraft and what is needed to support them.

The two companies have signed an agreement to explore new propulsion technologies.

Air New Zealand chief executive Christopher Luxon said with this country's large volume of renewable electricity, and Air New Zealand's regional network, the country is seen as the ideal test bed for these technologies.

"Our regional fleet accounts for approximately 40 per cent of our domestic emissions so there's an enormous opportunity for carbon savings. It could be a significant contributor to us reaching our twin goals of carbon neutral growth from 2020 and reducing emissions to 50 per cent of 2005 levels by 2050."

Under the agreement, the partners will investigate the development of these new solutions and the required systems to support them such as airport and regulatory infrastructure, maintenance, ground and flight operations.

Luxon said hybrid aircraft are expected to enter the market in the 'next decade or so'.'

Depending on when hybrid and electric technologies become available for larger turbo-prop aircraft, the airline believed there was potential for these to be a viable option for its regional network.

ATR chief executive Stefan Bortoli said the company believed turboprop technology would be an essential part the future of air transport.

'Hybrid and electric aircraft clearly are in that way forward. The combination of ATR and Air New Zealand jointly exploring the huge opportunities and implications on the whole regional aviation ecosystem is the perfect team,' he said.

ATR is based in Toulouse and is a joint venture between Leonardo of Italy and Airbus.

The pace of developing hybrid-electric aircraft has been quickening this year.

Boeing-backed Zunum said it aimed to have its first hybrid-electric aircraft delivered to a charter airline in 2022. The aircraft will fly up to 12 passengers more than 1000km and the United States company wants to build larger planes with greater range.

The new aircraft would be powered by twin fans attached to the rear of its fuselage. The covered fans will be driven by battery-powered electric motors. A conventional fuel-powered motor will initially serve as a back-up system.

Airbus, Rolls-Royce and Siemens have also formed a partnership which aims at developing a demonstrator.

The companies' E-Fan X hybrid-electric demonstrator is anticipated to fly in 2020 following ground testing, provisionally on a four-engine BAe 146, with one of the aircraft's four engines replaced by a 2MW electric motor.

In June Air New Zealand announced it had entered a partnership with the innovation arm of United States airline JetBlue Airways that has already invested in flying cars and electric planes.

The airlines announced an international innovation partnership around JetBlue Technology Ventures (JTV), the venture capital subsidiary of JetBlue Airways, a Silicon-Valley-based company, which incubates, invests in, and partners with early-stage start-ups.

Among JetBlue Technology's existing moves has been an investment in Joby Aviation, a startup that's developed an electric-powered short hop vertical takeoff taxi and Zunum.