MAX KINGSLEY-JONES / LONDON
Deals for more than 100 aircraft are expected to be concluded by EasyJet and Ryanair within the next couple of months, as Europe's low-cost carriers take advantage of the extremely competitive offers available since the 11 September terrorist attacks.
EasyJet is in talks with Airbus and Boeing regarding a $4 billion deal for 75 150-seaters, while rival Ryanair is understood to be close to finalising its long- awaited acquisition of up to 50 more aircraft.
According to EasyJet chief executive Ray Webster, when the airline's last order competition was held in 1997, the Airbus A319 was eliminated because its maximum seating capacity was lower than the 737-300/700's 149 passengers, and its residual value prospects were not seen as being as strong as the Boeing type.
"Capacity is no longer an issue as Airbus is now proposing to add two overwing exits, and it now appears that the values are performing well - perhaps even better than the Boeing," says Webster. The current evaluation began around a year ago, and an order is expected to be finalised in a couple of months, he adds.
EasyJet is an all-737-operator, with 18 -300s and nine -700s, and a further 23 -700s due for delivery by May 2004. Webster says that the new aircraft are needed to cover growth, which will average 25% annually in the short term, and fleet replacement. "Most of our aircraft are on seven-to-ten year leases and we don't plan to extend these," says Webster. Around seven of the new aircraft would be delivered in 2003, with the remainder arriving between 2004 and2007, by which time all the -300swill have left the fleet.
Webster acknowledges that a mixed Airbus/Boeing fleet will have some negative impact on the cost base, and will only be undertaken "if it produces substantial long-term shareholder benefits". The advantage of splitting the fleet, or indeed the 75-aircraft order, between the rival suppliers will allow the airline to be "ambivalent towards which aircraft we buy".
Meanwhile, Ryanair's much publicised efforts to secure up to 50 737s at knock-down prices are believed to have accelerated since 11 September. Last August, frustrated at the price offered by Boeing for new 737-800s, the airline advertised for offers for 50 737s. However, since the terrorist attacks, the airline is understood to have received offers for over 400 narrowbody aircraft, and is now close to a deal. It is not clear if the acquisition will be of 737s as originally planned, or another type such as the A320.
Source: Flight International