easyJet Confirms Purchase of up to 235 New Planes
LONDON -- The shares of easyJet have gained 2.8% as of 8:35 a.m. EDT after the budget airline confirmed the purchase of up to 235 new planes.
The FTSE 100 member said it had agreed arrangements with Airbus to acquire 35 new A320 aircraft for delivery between 2015 and 2017, as well as 100 new A320neo aircraft for delivery from 2017 until 2022. The deal also provides easyJet with the right to acquire a further 100 A320neo aircraft.
easyJet claimed the planes were sourced at "highly attractive prices" and at a greater discount to the list price than the group's existing Airbus contract. The airline revealed that the list price of an A320 was $76 million and the list price of an A320neo was $92 million. easyJet also said the 180-seat A320neo planes would provide a cost-per-seat saving of between 11% and 12% when compared to the 156-seat A319 planes currently in use. The new planes should help the airline increase its passenger capacity by 3% to 5% a year.
easyJet chief executive Carolyn McCall said:
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, the airline's chairman, added: "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."
Today's share-price gain confirmed easyJet as one of the market's largest gainers of the last two years. During mid-2011, the price languished at 300 pence but topped £13 earlier this year.
City forecasts suggesting that earnings may soar from 63 pence to 83 pence per share this year seem to have drawn many buyers to the stock. Of course, whether today's fleet news, that share price ascent, and the wider prospects of the airline sector still combine to make easyJet a buy is something only you can decide.
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