EasyJet board approves purchase of 135 Airbus A320s between now and 2022
Easyjet shareholders have voted in favour of the airline’s order of 135 new Airbus A320 aircraft despite opposition from founder Sir Stelios. He says the aircraft order was “a good deal for Airbus and a bad deal for Easyjet shareholders”. Easyjet chairman John Barton said: “The vote in favour of our new fleet arrangements will allow Easyjet to continue its successful strategy of modest, profitable growth and sustainable returns for our shareholders.” EasyJet has ordered 35 current A320 aircraft for delivery between 2015 and 2017, and 100 new generation A320 Neo aircraft for delivery between 2017 and 2022. The Neo planes (new generation engine) planes are meant to be a bit more fuel efficient. EasyJet’s fleet currently consists of 191 planes, of which 138 are A319s (which can take 156 passengers) and 53 are A320s (which can seat 180 if all in one class). The new A320 Neo planes are the same size as the older A320s and can also take 180 passengers, in one class. EasyJet so far only has one class, so can get the maximum number of seats per plane.
EasyJet (Carolyn McCall) claims flying on their planes uses about a third less fuel, and so generates a third less CO2, than the equivalent flight with a full-service carrier.
Wikipedia on EasyJet’s fleet
|Largest A319 Operator
A 319s have 156 seats:
A320 all have 180 seats:
Airbus says of the A320 Neo:
“Improvements with the A320 neo include a 15% reduction in fuel consumption, two tonnes of additional payload, up to 500 nautical miles of more range, lower operating costs, along with reductions in engine noise and emissions. ” (presumably compared to the previous A320s). link
Even if EasyJet only increases its number of passengers by 2.5% per year, over 10 years, that would be an increase of 28%. So even if the fleet becomes 15% more fuel efficient over that time, there would be a net increase in their fuel use and carbon emissions, by 2023.
The number of passengers EasyJet carried in 2012 was 6.7% higher than in 2011. link EasyJet’s number of passengers was about 57% higher in 2012 than it was in 2007 link So if it continues to grow at anything like its past rate, the airline’s carbon emissions will be growing enormously. The emissions per seat might be slightly lower, but the total number will be much larger. The airline will seek the maximum publicity for the cuts in carbon per seat, ignoring the rise in the total.
Easyjet wins battle with Stelios over new aircraft
Easyjet shareholders have voted in favour of the airline’s order for new Airbus aircraft despite opposition from founder Sir Stelios Haji-Ioannou.
The no-frills carrier announced the order for 135 new aircraft last month and it was approved by shareholders at a general meeting held today (July 11) at the Easyjet headquarters at Luton airport. There were 193.7 million votes (57.3 per cent) in favour of the aircraft deal with 144.1 million votes (42.7 per cent) against the proposal.
The approval came despite Haji-Ioannou, who is still Easyjet’s largest shareholder, vowing to vote against the order. The entrepreneur, who set up the airline in 1995, has claimed that the aircraft order was “a good deal for Airbus and a bad deal for Easyjet shareholders”.
Easyjet chairman John Barton said: “The vote in favour of our new fleet arrangements will allow Easyjet to continue its successful strategy of modest, profitable growth and sustainable returns for our shareholders.”
The airline has ordered a total of 135 Airbus A320 including 35 current A320 aircraft for delivery between 2015 and 2017, as well as 100 new generation A320 Neo aircraft , which can carry up to 180 passengers and will be received from 2017 to 2022.
The new order has a list price of $11.9 billion but Easyjet said it had been given a “substantial discount” by Airbus, although it gave no further details.
Stelios fumes after shareholders back easyJet plane deal
Sir Stelios Haji-Ioannou has threatened easyJet’s directors with legal action after losing a shareholder vote on the budget carrier’s $13bn (£8.6bn) plane order.
The billionaire founder of the airline is starkly opposed to the jet-shopping spree, and used his family’s near-37 per cent stake to vote against the deal at its extraordinary general meeting in Luton yesterday.
However, easyJet’s board secured the backing of institutional investors and the vote, which needed 50 per cent agreement to be approved, was passed by 192 million votes in favour, to 144 million opposed.
“It’s a disgrace that shareholders were not told the full facts of this transaction,” a spokesman for Sir Stelios said.
“Clearly the board got its way – for now. But if in the coming years Sir Stelios believes this deal has been destructive of shareholder value, he will hold directors to account, legally if necessary.”
Only four people voted in person at the meeting – which lasted just 15 minutes – at easyJet’s orange Luton hangar. And the City said that the backing of the vote was a victory for chief executive Carolyn McCall’s strategy at the airline.
“Stelios has effectively admitted defeat in his battle to turn easyJet into a slow-to-no-growth cash machine,” the Investec analyst James Hollins told Bloomberg. “EasyJet has every reason to build out and improve its fleet size and efficiency,” he added.
Easyjet’s deal sees the budget carrier buying 135 new passenger jets worth about $13bn from Airbus, with 35 A320s for delivery by 2017, 100 new A320neos for delivery from 2017 to 2022, and options on 100 additional A320neos.
The FTSE 100-listed airline claimed it had secured a bigger discount on the list price than with its last major plane purchase, more than a decade ago.
Speaking after the meeting, easyJet’s chairman, John Barton, said: “The vote in favour of our new fleet arrangements will allow easyJet to continue its successful strategy of modest, profitable growth and sustainable returns for our shareholders.”