EasyJet Plc will order an additional 157 Airbus SE A320neo jets, with an option to add 100 more, as demand for travel continues to surge and production slots for the most popular planes become increasingly hard to come by this decade.
(Bloomberg) — EasyJet Plc will order an additional 157 Airbus SE A320neo jets, with an option to add 100 more, as demand for travel continues to surge and production slots for the most popular planes become increasingly hard to come by this decade.
The airline said the order will enable growth to continue beyond 2028, with deliveries from the latest commitment running through 2034. The carrier is also converting 35 of its previously ordered A320neo into the larger A321neo as it looks to tap better economies of scale.
EasyJet said the aggregate value of the planned purchase and conversions is about $19.9 billion, based on the latest Airbus list prices. Customers typically get steep discounts for major orders.
“We have set out an ambitious roadmap to serve more customers and deliver attractive shareholder returns, underpinned by a continued focus on costs and operational excellence,” Johan Lundgren, EasyJet’s chief executive officer, said in the statement.
The purchase, which requires shareholder approval, will let EasyJet replace its remaining A319 aircraft, a smaller variant that’s no longer popular with airlines. The deal also allows the carrier to switch out about half of its older-generation A320ceo aircraft that have less fuel-efficient engines.
The carrier is in exclusive talks with CFM International, a General Electric Co. and Safran SA joint venture, for engines to power the new order.
With the new order, EasyJet will have a backlog of more than 300 Airbus jets. The company follows rival Ryanair Holdings Plc in placing a massive purchase commitment as airlines seek to replace older planes. Airbus and rival Boeing Co. have said they’re practically sold out for the remainder of the decade on their workhorse narrowbody airliners.
The carrier expects capacity in the quarter that began Oct. 1 to grow 15%, saying ticket yields were ahead year on year. Easyjet expects to report a fiscal year profit before tax of between £440 million and 460 million, following a bumper summer.
The airline’s medium-term target is to reach pretax profit of more than £1 billion, it said. The company also said it will reinstate its dividend payments, and intends to pay out 10% of this year’s profit after tax in early 2024. It expects to increase payouts to 20% of profit in next year.
(Updates with CEO comment in fourth paragraph.)
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