UK low-fare carrier easyJet has confirmed it has reached a tentative agreement with Airbus to acquire up to 235 new Airbus aircraft after it selected the European manufacturer - its current exclusive supplier of aircraft - ahead of rivals Boeing and Bombardier Aerospace to support its future fleet renewal and development needs. During Paris Air Show week the airline revealed it has entered into ‘arrangements’ with Airbus to acquire 35 A320ceo and 100 A320neo jets, plus options on a further 100 A320neos.

The majority of these aircraft will be used for renewal purposes and replacing older Airbus A319s that are being retired from service and returned to lessors but around 50 of the firm orders will act as growth aircraft and used to continue easyJet’s existing strategy of capacity seat growth of between three per cent to five per cent per annum. The A320ceo aircraft are due for delivery between 2015 and 2017, while the A320neo jets are due between 2017 and 2022. All the A320ceos will be fitted with the manufacturer’s Sharklet wing modification.

According to easyJet, the deal provides the ability for it to manage its network growth to market conditions in a sustainable manner. Whilst the announcement this week delivers an overall fleet of 276 aircraft by 2022, the arrangements will give easyJet the ability to manage the fleet size to between 165 and 298 aircraft in 2022 depending on economic conditions and opportunities available.

"I am delighted that easyJet is able to announce its fleet plans,” said Carolyn McCall, Chief Executive Officer, easyJet. "All manufacturers competed hard for the easyJet business. Both Airbus and Boeing offered us new generation aircraft that met our requirements and offered greatly improved fuel efficiency. Ultimately, Airbus offered us the best deal, and at a price with a greater discount to the list price than their landmark fleet purchase with easyJet in 2002.

"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," she added.

Although easyJet’s Chairman, John Barton has stated publicly that discussions on the new fleet have been “robust and thorough” and will “enhance returns and dividends to shareholders,” it is sure to further add to the negative feeling between the airline’s board and original founder Stelios Haji-Ioannou who has been really outspoken over plans to grow the business and invest in additional equipment.

In the immediate aftermath of the order the easyGroup executive and largest individual shareholder in the airline said: “Yet another huge capital expenditure deal with the same supplier at "secret" prices… Naturally it raises more questions than answers. We will ask all our questions when we have seen the full shareholder circular which must include the actual price to be paid for each aircraft and the incremental profit each of these aircraft will actually deliver.” This is sure to make final discussions to gain shareholder approval for the order next month rather interesting.

Although an Airbus executive confirms to The HUB that easyJet does hold transfer rights to switch any of its orders to other variants of the A320ceo and A320 neo families, the carrier has specifically selected the A320 variant to support its renewal. In its previous landmark order for Airbus equipment when it switched supplier from Boeing easyJet originally acquired 156-seat A319s but over recent years as options have been converted and additional orders placed it has favoured the larger A320.

According to the carrier the 180-seat A320neos are expected to deliver a cost per seat saving of between 11 per cent and 12 per cent, compared to the smaller A319s they will replace. The renewal process will also enable easyJet to avoid costly major maintenance checks on its current fleet and it says total expected fleet acquisition and overhaul expenditure as a percentage of revenue is expected to fall from 18% in the period 2005 to 2012, to 10 per cent to 12 per cent in the period 2018 to 2022.

When easyJet first introduced the A320 into scheduled operation in March 2008 it originally based the aircraft at London Gatwick and Manchester and used them on flights to Alicante, Corfu, Faro, Gibraltar, Heraklion, Innsbruck, Las Palmas, Luxor, Malaga, Malta, Marrakech, Palma, Paphos and Tenerife, but now the aircraft is being used at bases across Europe serving over 100 different markets.

We thought it would be interesting to see what specific markets are seeing the highest concentration of A320 deployment and the table below shows an analysis of the carrier’s June flight schedule ranked by percentage of A320 departures. This month almost one in four easyJet flights is operated using an A320 with the longer sector routes into markets such as the Canary Islands, Greece, Cyprus, Russia and across into Middle East the main network points the aircraft is being utilised to serve.