easyJet, the fast-growing low-cost airline, is in negotiations for new aircraft for delivery up to 2007.
The airline has entered discussions with Boeing and Airbus - over the Boeing 737-700 and the Airbus A319 aircraft - with the intention to make a decision based on an analysis of the best medium and long-term financial and operating benefits. Nominally, the discussions concern the possible acquisition by easyJet of seventy-five additional aircraft - this number may change during the course of the negotiations.
Shareholders will be kept informed of any further developments as it is anticipated that any resulting contract would be subject to shareholder approval.
Ray Webster, easyJet Chief Executive, said:
“Given the current state of parts of the global aviation industry, this is potentially a very good time to be addressing our long-term aircraft needs.
“We have already committed to grow aircraft capacity by approximately 25% per annum until 2004 and need to secure delivery positions beyond that date. The exact growth rates will be dependent on both the final aircraft delivery schedule and the retirement of a number of existing aircraft, which are still under discussion.
“While commonality of fleet is an important component of the easyJet business model, we feel it is appropriate to consider all options and have, therefore, entered into negotiations with both Boeing and Airbus.
“The Airbus A319 has not previously been operated by easyJet or other low-cost airlines as its original capacity was limited to 145 seats - against the 149-seat Boeing 737-300/700. However, Airbus has now informed us that the A319 will be available with up to 150-seat capacity, which makes it a viable competitive alternative.
“We would only undertake to operate a mixed fleet if it would produce substantial long-term shareholder benefits.”
The easyJet fleet currently consists of 18 Boeing 737-300 and 9 Boeing 737-700 aircraft, making 27 aircraft in total (the `Next Generation` 737-700 is the updated 737-300). A further 23 Boeing 737-700 aircraft will be added to the easyJet fleet by May 2004. At that date, the easyJet fleet, according to the existing arrangements, is planned to consist of 48 aircraft - allowing for two 737-300 retirements.
At the time of flotation in November 2000 and the subsequent Open Offer and Placing in November 2001, the airline stated that it intends to maintain a modern fleet and expects to hold its aircraft for a period of approximately seven years when they will be sold in the second-hand market or returned to lessors.