Moneycontrol PRO
Upcoming Webinar:Watch a panel of experts discuss: Challenges of continuously evolving regulation for Cryptocurrency, on 7th July at 3pm. Register Now
you are here: HomeNewsWorld

EasyJet exercises option to buy 56 Airbus A320neo jets

EasyJet said in a statement it had obtained steep discounts for the jets, which are worth $6.5 billion at list prices and are due for delivery between 2026 and 2029.

June 21, 2022 / 01:07 PM IST

British low-cost airline EasyJet on Tuesday exercised options to purchase 56 fuel-efficient single-aisle A320neo aircraft from European aerospace giant Airbus.

EasyJet said in a statement it had obtained steep discounts for the jets, which are worth $6.5 billion at list prices and are due for delivery between 2026 and 2029.

The carrier, based in Luton, north of London, added it has converted 18 A320neos orders to A321neos for delivery between 2024 and 2027.

"The proposed purchase firms up EasyJet's order book with Airbus, continuing the company's fleet refresh, as A319s and older A320s leave the business and new A320 and A321 neo aircraft enter providing up gauging, cost and sustainability enhancements to the business," it said in the statement.

"The directors believe this will support the delivery of our strategic objectives and provide the aircraft to help build strong shareholder returns."

Close

The price of the 56 A320neos will be "very substantially lower" owing to concessions EasyJet was granted in connection with a 2013 agreement with Airbus. EasyJet said the A320neo jets would deliver between 15 and 25 percent unit cost fuel efficiency, depending upon which older aircraft they replace.

"This will significantly reduce easyJet's fuel costs and therefore improve our overall cost base," the airline added. "It will also reduce the costs of compliance with various environmental regulations."

Some airports also provide discounted fees for new generation aircraft, it noted. The announcement came one day after EasyJet decided to reduce the number of its flights this summer, as the UK aviation sector struggles with severe staff shortages.

Airlines and airports are currently struggling to recruit staff as skies reopen after the lifting of pandemic lockdowns, which saw the aviation sector slash thousands of posts.

Despite the travel chaos, EasyJet had stressed Monday that its bookings remained "strong" for the peak-demand summer months of July and August.

Global air passenger traffic is expected to hit 83 percent of pre-pandemic levels this year and the aviation industry's return to profit is "within reach" in 2023, the International Air Transport Association said Monday.
AFP
first published: Jun 21, 2022 12:50 pm
Sections
ISO 27001 - BSI Assurance Mark