UK budget carrier easyJet has firmed up purchase rights on 27 A320ceos, for delivery between 2015 and 2018, to tap into “disciplined growth” opportunities.
All-Airbus operator easyJet already operates a fleet of 225 A320s and expects to grow to 304 aircraft by 2019, although this could be decreased to 204 or increased to 316 aircraft depending on market conditions. This growth will be supported by the 27 newly ordered aircraft, along with the 35 A320ceos and 100 A320neos it ordered in June last year.
EasyJet said it has secured the aircraft at “a very substantial price discount,” adding that these latest A320s will give it a 7%-9% unit cost advantage over its current-generation A319s.
“We are bringing new aircraft into the fleet as we continue to see a significant number of new profitable opportunities in our core markets in the near term and in order to maintain our cost advantage,” easyJet CEO Carolyn McCall said.
With this order, easyJet will have committed to a total of 415 A320 family aircraft, including 315 A320ceos, making it Airbus’ largest narrowbody customer in Europe. EasyJet also has purchase rights on a further 100 A320neos.
The move is likely to draw criticism from easyJet founder and shareholder Stelios Haji-Ioannou, who has previously opposed further fleet growth and called for greater returns to the airline’s investors. Haji-Ioannou also recently raised concerns over excessive pay levels at Fastjet, another of his airline investments.
“The additional aircraft will augment easyJet’s highly cash generative model and the board will continue to keep the balance sheet under review and intends to make further returns of capital to shareholders in the coming years,” easyJet said.
Haji-Ioannou may be partially placated by easyJet’s plans to increase its dividend payout from one-third of its profit after tax to 40% for the financial year ending Sept. 30. EasyJet is expected to issue its next financial and operational performance update on Oct. 3 and its full-year results on Nov. 18.