EasyJet edges closer to new aircraft order

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Low-cost carrier EasyJet is continuing its evaluations of new products from Airbus, Boeing and Bombardier as it advances towards a sizeable order for delivery post-2017.

In its full-year results, the UK-based airline says that as the "technical and commercial" studies evolve it will bring a proposal to its shareholders, although does not give a timeframe.

The report indicates it is examining the A320neo, 737 Max and Bombardier CSeries, but also suggests it will look to place an order for current-generation narrowbodies to bridge the period between 2014-2017.

"EasyJet's intention for any new aircraft order is to maximise the economic efficiencies of the fleet and to support further returns-focused capacity growth," it says.

During the year to 30 September the carrier further increased the proportion of 180-seat A320s in its fleet against 156-seat A319s. It took delivery 19 of the higher-capacity jets as seven of the smaller narrowbodies exited the fleet,

It says the A320s have delivered a per-seat cost-saving of around 7% over the smaller variant with "minimal reduction in yields". It will continue to increase the mix of A320s in its fleet, it says.

For the full year EasyJet grew revenue to £3.85 billion ($6.12 billion), up 11.6% against the £3.45 billion recorded last year, with pre-tax profit at £317 million, a rise of 27.9% against the previous year's figure of £248 million.

The improved performance came despite the sluggish European economy, a £182 million increase in fuel costs to £1.14 billion over the 12 month period and a £50 million hit from increased air passenger duty charges in the UK, France and Germany.

Spain continues to be a challenging market for the airline with outbound overcapacity "leading to lower yields than in other EasyJet markets".

Capacity in the country will be cut by around 9%, in part due to the closure of its Madrid base from 1 December. The vast majority of the 300-plus staff located at Madrid have accepted offers to relocate to other bases in its network, the carrier says.

Aircraft formerly based in Madrid have been redeployed elsewhere within its network in "areas which have the potential to drive higher returns" such as new regional bases in France - where it continues to target Air France's market share - Lisbon in Portugal and at London's Gatwick and Southend airports. Additional aircraft will also be based at Edinburgh and Manchester in future, it says.

With competitors retrenching it believes there will be opportunities for profitable growth in 2013 and it will increase capacity in the first half by around 3.5%, it says, with a similar rise across the full year.