Aer Lingus is the process of deciding whether it will opt for Airbus's re-engined A320neo family or Boeing's 737-9 Max to increase fuel-efficiency on its transatlantic flights.
"We will wait 12 to 18 months [before deciding] in order to carry out a thorough analysis," said the airline's chief commercial officer Stephen Kavanagh. Although Aer Lingus's current fleet consists of Airbus jets, it is in open dialogue with Boeing, he added.
Given the large amount of orders being placed, uncertainty regarding available positions and timely deliveries is another concern for the airline. "We need to be convinced of the economics," said Kavanagh, who added the aircraft would be financed via operating lease or direct acquisition. "We're actively reviewing our options and are under no pressure."
Aer Lingus is gearing up to own more of its aircraft directly, according to Kavanagh. "We have €1 billion ($1.57 billion) in gross cash on our balance sheet, which is more than necessary for prudent financial management," he noted.
The majority of the airline's current aircraft portfolio is on operating lease from Air Lease, BBAM, ILFC and RBS Aviation Capital, according to Flightglobal's Ascend Online database.
In keeping with its financing goal, half the Airbus A350-900s Aer Lingus has on order from 2016 to 2019 are to be paid for in cash, while the remainder will be leased, Kavanagh said.
Aer Lingus is not overly concerned about newly-disclosed delays to A350 deliveries. "We still have longevity on our A330s, which have an average age of less than six years," Kavanagh said. "Too much slippage wouldn't be ideal, but we would hope to get some form of compensation if that were the case."
Meanwhile, the carrier is due to take delivery of four ex-Iberia A319s leased from RBS Aviation Capital. Two aircraft will arrive by the third quarter of this year, while the remainder are expected by the third quarter of 2013, Kavanagh said. "We have already leased ex-Iberia aircraft, so it will be a relatively smooth transition," he noted.
Aer Lingus recently returned some of its A320s and A321s that came off lease to ILFC. "We want to keep fleet flat in terms of size, while updating composition and to this end we have completed a few sale and leasebacks with short leaseback terms," Kavanagh said.
The airline currently has one 2000-vintage A320 (MSN1242) actively available for sale. "We wanted to keep our aircraft at 36, so put the 37th into storage," Kavanagh explained.
Source: Air Transport Intelligence news