Republic cites ‘incentives’ in Leap selection for A320neo

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Incentives from engine-maker CFM International swayed Republic Airways Holdings' decision to select the Leap-X1A powerplant for its tentative order for 80 Airbus A319neo and A320neo twinjets, the Indiana, USA-based company said.

It cited intense competition for the Airbus order from Pratt & Whitney, which makes the PW1100G engine set to power Republic's 40 Bombardier CSeries aircraft, but said CFM "stepped up with significant incentives".

CFM's incentives will "enhance Frontier's financial results in the near term as well as provide advantageous pricing for the [A320neo-family] fleet", Republic added.

In a regulatory filing, Republic stated its memorandum of understanding with CFM covers a fuel-burn guarantee, future spare engine pricing, plus a reduction in the overhaul cost of the CFM56 engines powering Frontier's current fleet of A320-family aircraft.

Republic also cited a 21 June agreement with GECAS to amend lease terms on certain A319s operated by Frontier, including the return of four aircraft to the lessor in 2012.

"The remaining 18 A319 GECAS leases will be extended for a period of three years and the average monthly lease will be reduced," Republic said.

After Republic placed an order for 40 CSeries CS300s in February 2010, the company said it planned to align CSeries delivery dates with A319 returns.

Republic is scheduled to receive its first aircraft in the second quarter of 2015.

It is not clear how Republic intends to operate a dual fleet of 40 CSeries and 40 A319neos, which are likely to have similar configurations.

Republic intends to operate the CSeries in a 138-seat configuration and has said it plans to add two seats to its current A319s for a total of 138 seats.

Despite those similarities, Republic said it remains committed to the CSeries.