EasyJet set for turbulence over big Airbus order

 
Marion Dakers
EASYJET said yesterday it has scored a unique deal with Airbus to buy at least 135 new planes – subject to shareholder approval.

Chief executive Carolyn McCall said the low-cost carrier was alone in having details of its previous order with Airbus, meaning it could clinch a steep discount to the £7.6bn list price.

“This was a real fight between Boeing and Airbus,” McCall told reporters yesterday. “Ultimately Airbus offered us the best deal, and at a price with a greater discount to the list price than the landmark fleet purchase in 2002.”

EasyJet expects to shave 11 to 12 per cent from its cost per seat using the A320neo aircraft. It has placed an order for 100 of the new-generation planes and has the option to buy 100 more. EasyJet has also bought 35 current-generation A320 planes.

Around two-thirds of the new planes will replace ageing aircraft in EasyJet’s fleet, with the rest used to expand.

Executives will meet with investors over the coming weeks to talk through the finer points of the deal – though the price paid for the planes will remain under wraps due to a confidentiality pact with Airbus.

Sir Stelios Haji-Ioannou, the founder of EasyJet whose family holds a 36 per cent stake, has long opposed the firm’s plans to spend money on new aircraft.

“Yet another huge capital expenditure deal with the same supplier at ‘secret’ prices…. Naturally it raises more questions than answers,” he said.

Chairman John Barton said he was confident investors will back the deal at a meeting on 11 July. Credit Suisse sponsored the deal, and along with Nomura is joint broker. Norton Rose Fulbright acted as legal adviser.