EasyJet says planned A320neo deal 'keeps fleet flexibility'

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EasyJet says that its proposed deal for up to 235 A320s will allow it to maintain the fleet flexibility it has enjoyed through its existing orders with Airbus.

The UK based low-cost carrier confirmed earlier today that, subject to shareholder approval, it had agreed with Airbus to potentially order up to 235 aircraft, including 135 firm and another 100 commitments.

The deal comprises a planned order for another 35 current-generation A320s as part of its existing agreement with the manufacturer for delivery between 2015 and 2017, along with 100 A320neos for delivery between 2017 and 2022. It also has the right to acquire up to 100 additional A320neos.

The airline is yet to announce its engine selection, which will between the CFM International Leap and Pratt & Whitney PW1000G. EasyJet's current A320 family fleet is powered by CFM56s.

EasyJet says the planned acquisition "continues the high level of fleet flexibility provided by the current arrangements". It adds that the announcement will result in the delivery of a fleet of 276 aircraft by 2022, and that the new arrangements also give EasyJet the ability to manage the fleet size to between 165 and 298 aircraft in 2022 "depending on economic conditions and opportunities available".

The airline expects that as a result of the deal its fleet acquisition and overhaul expenditure as a percentage of revenue will fall from 18% in the period 2005 to 2012, to 10-12% between 2018 and 2022.

"All manufacturers competed hard for the EasyJet business. Both Airbus and Boeing offered us new-generation aircraft that met our requirements and offered greatly improved fuel efficiency," says EasyJet chief executive Carolyn McCall. "Ultimately, Airbus offered us the best deal, and at a price with a greater discount to the list price than their landmark fleet purchase with EasyJet in 2002."

EasyJet says it expects to send a circular to shareholders later today giving details of the "New Framework Arrangements" and containing notice of a general meeting - to be held on or around 11 July - at which a resolution to approve the New Framework Arrangements will be proposed.