easyJet agreed to purchase 120 new Airbus A319 aircraft and was granted the right to purchase, at the same basic price, up to 120 additional Airbus A319 aircraft, subject to certain conditions.Ê The agreement was approved by easyJet’s shareholders at an Extraordinary General Meeting on 12 March 2003.Ê
To date, Airbus has delivered 59 A319 aircraft and a further 61 aircraft are expected to be delivered between now and 2008.
easyJet announces that it has exercised its right under the Additional Purchase Rights granted to it pursuant to the Airbus Contract to acquire a further 20 A319 aircraft for delivery during 2008 and 2009 to ensure its continued growth to the end of the decade.
The terms for the purchase of these 20 aircraft, including the basic price, certain purchase incentives and credits made available and the terms of payment are substantially the same as those for the purchase of the first 120 aircraft under the Airbus Contract, which were described in the circular to shareholders dated 24 February 2003.Ê
As confirmed in the circular, under the Airbus Contract the aircraft basic price of each A319 aircraft, as at January 2001 being the date by reference to which the contractual base price is quoted, was approximately US$44.2 million.
Thus the total list price for 20 new A319 aircraft would be approximately US$0.9 billion. However, under the Airbus Contract easyJet was granted substantial price concessions by Airbus and the selected engine manufacturer - all prices above are subject to price escalation which reflects inflation.
easyJet presently finances its fleet through a mix of bank lending, secured on the relevant aircraft which are owned by easyJet, and sale and lease back transactions.
easyJet has entered into financing commitments in relation to the majority of its 61 undelivered aircraft, but none of the 20 aircraft announced under today’s arrangement. The Company intends to retain flexibility in determining the method of financing these additional aircraft but expects that it will use a number of sources of debt finance and other financial structures in addition to easyJet’s internal resources and cashflow.
The additional aircraft will enable easyJet to continue its planned expansion through 2008 and into 2009 which will enable it to maintain its position as one of the leading European low cost operators.
Andrew Harrison, easyJet Chief Executive, said:
“Our original agreement with Airbus for up to 240 A319s was a great deal for our shareholders and customers which underpins our low cost base and our continued ability to offer low fares to our 30 million customers.
“Today’s announcement for a further tranche of 20 aircraft marks another step in easyJet’s continuing development as Europe’s best low-fares airline.”