EasyJet agrees to buy 135 new planes from Airbus – it has 190 planes now

EasyJet says it has entered into arrangements to buy 35 A320 planes  and 100 A320neos, for an undisclosed price – but which includes a large discount. Sir Stelios, who still owns 37% of easyJet,  has been against buying so many new planes, saying it is a “vanity exercise” and the cost is too high.”  The undiscounted price for a A320 is some $76m, and $92m for the A320neo.  EasyJet said it could make savings, largely on fuel, of some 11 – 12% with the new planes, compared to the A319.  It could then pay more from its profits to its shareholders in future.  Shareholders of easyJet have to vote on whether to agree the sale of the planes at their meeting on 11th July.  EasyJet now has around 190 planes, and of the 135 new planes, 85 would be used to replace less fuel efficient models. The other 50 would be for more growth.  Easyjet said: “Whilst the announcement today will deliver a fleet of 276 aircraft by 2022, as of today, 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.”



easyJet plc announces fleet plans

18 June 2013 (EasyJet)

Following a highly competitive fleet selection process, easyJet plc (“easyJet” or the “Company”) announces that, subject to shareholder approval, it has entered into arrangements (the “New Framework Arrangements”) with Airbus S.A.S. (“Airbus”) to acquire 35 Current Generation A320 Aircraft for delivery between 2015 and 2017 under its existing agreement and 100 New Generation A320neo Aircraft for delivery from 2017 until 2022, under a new agreement. Under this new agreement, Airbus has also granted the Company the right, but not the obligation, to acquire up to 100 further New Generation A320neo Family Aircraft.

Key highlights of the transaction:

  • Allows easyJet to continue to execute its successful strategy.
  • New generation aircraft sourced at highly attractive prices and at a greater percentage discount to list price than the Company’s existing Airbus contract.
  • Enhances easyJet’s cost advantage and mitigates against inflationary increases; the 180 seater New Generation A320neo Aircraft is expected to deliver a cost per seat saving of between 11% and 12%, compared to a 156 seater Current Generation A319 Aircraft.
  • 85 of 135 ordered aircraft will be used to replace ageing aircraft as they leave the fleet and return to lessors, with the remaining aircraft used to continue easyJet’s existing strategy of capacity seat growth of between 3% to 5% per annum.
  • Continues the high level of fleet flexibility provided by the current arrangements. Whilst the announcement today will deliver a fleet of 276 aircraft by 2022, as of today, 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.
  • Total expected fleet acquisition and overhaul expenditure as a percentage of revenue is expected to fall from 18% in the period 2005 to 2012, to 10% to 12% in the period 2018 to 2022.

Carolyn McCall, easyJet Chief Executive, commented:   “I am delighted that easyJet is able to announce its fleet plans today.

“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.

“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.

“These arrangements combined with easyJet’s cost advantage, leading network and compelling customer proposition mean that easyJet is uniquely positioned to be a structural winner in European aviation.

“This is a great outcome for easyJet, our shareholders and our passengers, and will ensure that easyJet is able to continue its successful strategy of delivering profitable growth and returns to shareholders.”

John Barton, easyJet Chairman, commented:

“Since joining the easyJet Board, I have spent a significant amount of time reviewing the rationale for ordering new aircraft and have been actively involved in the selection process, which I am sure has been robust and thorough. We have planned that the new fleet arrangements will be financed without recourse to shareholders and believe that the arrangements will enhance returns and dividends to shareholders.

“The new fleet arrangements will enable easyJet to continue its successful strategy of offering customers low fares to convenient airports and efficient and friendly service”

A circular is expected to be sent 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 2013 at which a resolution to approve the New Framework Arrangements will be proposed.



CAA data suggests Easyjet currently has 190 planes   link 



Airbus has also granted the Company the right, but not the obligation, to acquire up to 100 further New Generation A320neo Family Aircraft.

The airline’s board believes that there are profitable opportunities for easyJet to grow seats flown at around 3% to 5% a year. This comprises 2% to 4% seat growth from the introduction of new routes and/or increased frequencies and approximately 1% seat growth from flying 180 seat aircraft on routes currently operated by 156 seat A319 aircraft.

The airline said of the 135 aircraft to be delivered under the New Framework Arrangements, 85 aircraft will be for the planned replacement of the existing fleet as it ages over the next 9 years and aircraft are returned to lessors or sold. The New Framework Arrangements will also enable, but not require, easyJet to grow over the next 9 years.

easyJet noted that it expects the new Framework Arrangements to be funded through a combination of its internal resources, cashflow, sale and leaseback transactions and debt.




Also Flight Global





18.6.2013 (Management Today)

……… Easyjet’s headquarters at Luton airport are the focus of the business world’s attentions, with another storm brewing between the airline’s founder (and main shareholder), Sir Stelios Haji-Ioannou, and its chief executive, Carolyn McCall.

At the Paris Air Show yesterday, the airline put in an order worth $20bn (£12.8bn) for ‘as many as’ 235 new Airbus A320 and A320neo aircraft. The planes are more fuel-efficient than their predecessors, which McCall reckons will help the airline save money and ‘deliver [its] strategy’. But in January, Sir Stelios warned the airline not to buy any more planes, insisting that the expense will cripple it.

If it goes through, the order will not only replace 85 of Easyjet’s oldest planes, but it’ll increase its fleet to 298 by 2022.

That’s if Sir Stelios doesn’t block the transaction. In January, Sir Stelios offloaded 200,000 shares (although he still owns 37% of Easyjet), warning that if the airline makes any more purchases, he’ll sell off even more. For McCall, who has had more than her fair share of showdowns with Easyjet’s outspoken owner, that probably can’t come soon enough.

Easyjet’s wasn’t the only big order at the Paris Air Show.

Step forward, Adam Scott, the Goldman Sachs banker-turned-chief executive of Odyssey Airlines, a new ‘all-business-class’ which will begin operating from City Airport from 2016. Scott, who has no history whatsoever of running an airline, placed a $628m order for 10 110-seat CS100 jets from Canadian manufacturer Bombardier. The only problem is that the jets haven’t been tested yet, and City airport doesn’t have permission to operate them.