Allegiant to acquire more A320 family aircraft

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Las Vegas-based Allegiant Air has agreed to acquire 14 Airbus A320 family aircraft, and will purchase two additional Airbus A319s it currently leases.

It will also purchase six A319s when they are delivered in late 2014 through 2015 from lessor GECAS, which agreed to lease the aircraft to Allegiant in a 2012 deal.

The 14 A320 family aircraft that Allegiant will acquire comprise 12 A319s now leased to an European airline until 2018. Allegiant expects to close this transaction by end-June and will transition the A319s into its fleet as the lease on each aircraft expires.

Separately, the carrier will purchase one A319 and one A320 in 2015 and 2016 respectively upon delivery. The airline does not say where these aircraft will be purchased from. An Allegiant spokesperson was not immediately available to comment.

In addition, Allegiant has agreed to purchase two A319s in its fleet that it currently leases and expects to close this transaction by July. "The remaining six aircraft under the lease agreement executed in 2012 will be purchased at the time of delivery to Allegiant, expected to be in late 2014 through 2015," says Allegiant.

The airline and GECAS announced in 2012 that the carrier will lease the A319s, formerly operated by Easyjet.

Alllegiant will have 32 A320 family aircraft - 22 A319s and 10 A320s - in its fleet by end-2018 and will own all of them, says Allegiant president Andrew Levy in a statement. "We expect to use debt financing along with cash reserves to purchase these aircraft. Importantly, the additional A320/A319 aircraft are all sister ships to aircraft we currently operate. We remain active in the used Airbus market and hope to add more aircraft to our fleet during 2016 and 2017," he adds.

By purchasing the 12 A319s leased to the European carrier, Allegiant expects about $30 million in annual lease revenue starting in June 2014 through 2018. It will assume $142 million of secured debt under the purchase.

With the aircraft transactions, Allegiant expects its capital expenditures to be about $315 million in 2014 and $220 million in 2015.