Major new easyJet aircraft order
easyJet EXERCISES OPTIONS OVER 52 AIRBUS 319 AIRCRAFT
SECURES OPTIONS OVER A FURTHER 75 A320 FAMILY AIRCRAFT
104 AIRCRAFT NOW ON FIRM ORDER WORTH OVER $4 BILLION
easyJet today announces that it has reached agreement with the European aircraft manufacturer, Airbus, to exercise existing options (“Additional Purchase Rights”) over 52 Airbus A319 aircraft for delivery between 2008 and 2010 and to secure new options over a further 75 A320 family aircraft.
This will underpin easyJet’s growth over the coming years and ensures that the airline continues to operate some of the cleanest, quietest aircraft available. It will also help to secure thousands of European manufacturing jobs.
Today’s announcement means that easyJet now has 104 aircraft on firm order with Airbus, with a list price of over $4 billion, and holds purchase rights over a further 123 aircraft. The total size of easyJet’s order of Airbus aircraft (including options), first announced in October 2002, is 315. Of these, 88 have already been delivered.
The exercise of the 52 options is subject to shareholder approval.
Andy Harrison, easyJet Chief Executive, said:
“This major new aircraft order underpins our continuing rapid growth, which has been driven by our winning combination of low fares with care and convenience.
“This order supports both our growth and our environmental credentials. The combination of our modern fleet, with an average age of 2.2 years, and high utilisation means that we emit nearly 30% fewer emissions per passenger kilometre than traditional airlines flying similar routes. We welcome the Stern Review, which says that aviation accounts for just 1.6% of greenhouse gas emissions, and we have long campaigned to bring aviation into the European Emissions Trading System as soon as possible.
“easyJet’s growth over the coming years and the scale of this order will also support thousands of European jobs in aircraft manufacturing, tourism, airports and the many other industries that aviation supports.”
Under the agreement, dated 30 December 2002, and made between easyJet plc and Airbus G.I.E. (the “Airbus Contract”), the Company 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 “Additional Purchase Rights”. The agreement was conditional upon shareholder approval which was obtained at an Extraordinary General Meeting on 12 March 2003. easyJet announced that it had exercised Additional Purchase Rights over 20 Airbus A319 aircraft on 22 December 2005.
easyJet today has exercised its right to acquire a further 52 A319 aircraft under the Additional Purchase Rights granted to it pursuant to the Airbus Contract. It has also agreed certain amendments to the Airbus Contract including the grant of new Additional Purchase Rights over a further 75 A320 family aircraft; the release by easyJet of an undertaking given by Airbus relating to the maintenance costs of the A319 and a number of provisions which are of considerable economic benefit to easyJet. The exercise of the 52 Additional Purchase Rights and the amendments to the Airbus Contract are subject to shareholder approval and a circular setting out details of the amendments to the Airbus Contract and containing a notice convening an Extraordinary General Meeting will be despatched to easyJet shareholders in due course.
The terms of purchase of these 52 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 (the “Circular”). However, in recognition of the exercise of the Additional Purchase Rights and the release of the undertaking referred to above, Airbus has granted price concessions under the agreement amending the Airbus Contract in relation to these 52 aircraft and the other 68 aircraft subject to the Additional Purchase Rights. 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 52 new A319 aircraft would be approximately US$2.3 billion. However, under the Airbus Contract (as to be amended) easyJet has been granted substantial price concessions by Airbus and the selected engine manufacturer - all prices above are subject to price escalation which reflects inflation.
Of the 240 A319 aircraft covered by the original Airbus Contract, 192 have now been ordered of which 88 have been delivered with 32 scheduled for delivery by the end of September 2008.
Major new easyJet aircraft order: 104 aircraft
Moderator: Latest news team
EASYJET REPORTS RECORD PROFITS, UP 56% TO £129M
• Record profit before tax of £129 million, up 56% from £83 million in 2005.
• Passenger numbers rise by 11.5% to 33 million.
• Passenger revenues increased by 5.9% or £2.13 per seat, driven by strong summer trading.
• Ancillary revenues improved significantly in all areas rising by 34% or £0.86 per seat.
• Unit costs excluding fuel fell by 1.5% or £0.42 per seat from £28.78 to £28.36.
• Unit fuel costs increased by 33% or £2.48 per seat.
• Return on equity increased to 10.1% up 3 percentage points from 7.1% in 2005.
• 58 new routes and 11 new destinations were launched, expanding the network to 262 routes and 74 airports in 21 countries.
• Fleet grown to 122 aircraft with an average age of 2.2 years, making it one of the most modern and environmentally friendly fleets in Europe.
• Further expansion of fleet planned with 52 new A319s ordered, and options secured over a further 75. This brings the total number of aircraft on firm order to 104 worth over $4 billion, with a further 123 unexercised options still available.
• Strong balance sheet with cash of £861 million.
Commenting on the results, Andy Harrison, easyJet Chief Executive said:
"2006 was another year of successful growth with 33 million passengers choosing to fly easyJet, attracted by our winning combination of low cost, with care and convenience. We have continued to expand our range of destinations with 58 new routes launched during the year and the successful opening of our new base in Milan Malpensa.
“Our profits increased by 56% to a record £129 million, despite the big increase in fuel costs. Our profit growth was driven by a 34% increase in ancillary revenues per seat, significant improvements in passenger yields and a continuing reduction in our non fuel unit costs.
“Our Airbus order supports both our growth and our environmental credentials. The combination of our modern fleet, with an average age of 2.2 years, and high utilisation means that we emit nearly 30% fewer emissions per passenger kilometre than traditional airlines flying similar routes. We welcome the Stern Review, which says that aviation accounts for just 1.6% of global greenhouse gas emissions. We believe the best way forward is to bring aviation into the European Emissions Trading System as soon as possible.
“Today’s Airbus order underpins our future growth and we expect to increase capacity in 2007 by 15%. Current trading is in line with our expectations and we see yields for winter broadly in line with last year. As we look further forward we anticipate more pressure on yields in the summer due to continued aggressive competition. We remain focused on improving execution and delivery of results by revenue enhancement, network development and cost reduction. This year has seen an encouraging step towards improved return on equity. The Board remains confident that the business will make good progress in the coming years.”
• Record profit before tax of £129 million, up 56% from £83 million in 2005.
• Passenger numbers rise by 11.5% to 33 million.
• Passenger revenues increased by 5.9% or £2.13 per seat, driven by strong summer trading.
• Ancillary revenues improved significantly in all areas rising by 34% or £0.86 per seat.
• Unit costs excluding fuel fell by 1.5% or £0.42 per seat from £28.78 to £28.36.
• Unit fuel costs increased by 33% or £2.48 per seat.
• Return on equity increased to 10.1% up 3 percentage points from 7.1% in 2005.
• 58 new routes and 11 new destinations were launched, expanding the network to 262 routes and 74 airports in 21 countries.
• Fleet grown to 122 aircraft with an average age of 2.2 years, making it one of the most modern and environmentally friendly fleets in Europe.
• Further expansion of fleet planned with 52 new A319s ordered, and options secured over a further 75. This brings the total number of aircraft on firm order to 104 worth over $4 billion, with a further 123 unexercised options still available.
• Strong balance sheet with cash of £861 million.
Commenting on the results, Andy Harrison, easyJet Chief Executive said:
"2006 was another year of successful growth with 33 million passengers choosing to fly easyJet, attracted by our winning combination of low cost, with care and convenience. We have continued to expand our range of destinations with 58 new routes launched during the year and the successful opening of our new base in Milan Malpensa.
“Our profits increased by 56% to a record £129 million, despite the big increase in fuel costs. Our profit growth was driven by a 34% increase in ancillary revenues per seat, significant improvements in passenger yields and a continuing reduction in our non fuel unit costs.
“Our Airbus order supports both our growth and our environmental credentials. The combination of our modern fleet, with an average age of 2.2 years, and high utilisation means that we emit nearly 30% fewer emissions per passenger kilometre than traditional airlines flying similar routes. We welcome the Stern Review, which says that aviation accounts for just 1.6% of global greenhouse gas emissions. We believe the best way forward is to bring aviation into the European Emissions Trading System as soon as possible.
“Today’s Airbus order underpins our future growth and we expect to increase capacity in 2007 by 15%. Current trading is in line with our expectations and we see yields for winter broadly in line with last year. As we look further forward we anticipate more pressure on yields in the summer due to continued aggressive competition. We remain focused on improving execution and delivery of results by revenue enhancement, network development and cost reduction. This year has seen an encouraging step towards improved return on equity. The Board remains confident that the business will make good progress in the coming years.”