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easyJet to buy 120 A319s, with options for another 120 a/c
Click here for the easyJet press release
14 October 2002 easyJet selects Airbus as preferred supplier for 120 new aircraft easyJet plc ("easyJet"), Europe's leading low-cost airline, today announced that it had selected Airbus as the preferred supplier for 120 A319 aircraft, with options with price protection on a further 120 A319s. easyJet has granted Airbus exclusivity for 45 days to agree documentation. The agreement in principle is subject to contract. The detailed terms are subject to confidentiality restrictions, and any final agreement will be subject to shareholder approval. Key points of the deal: Firm order for 120 Airbus A319 aircraft for delivery from September 2003 over 5 years Options with price protection on a further 120 Airbus A319 aircraft until 2012 Airbus A319 will be configured with 150 seats, with the possibility of increasing to 156, compared to 149 on the Boeing 737-700 Options for larger sized Airbus A320 and Airbus A321 at pre-agreed prices. It is expected that the final contract would provide easyJet with a number of significant financial benefits: easyJet estimates substantial savings, compared to buying additional B737-700s today easyJet estimates the A319 would achieve an approximate 10% improvement per aircraft over the existing Boeing 737 operating cost base (measured per available seat kilometre) Airbus to provide extensive support so that the introduction of the A319 to be no more expensive than the B737-700 in the first two years Airbus backed maintenance program means cost not higher than Boeing Airbus assistance reduces residual value risk on remaining 10 owned B737-300s. Introduction of new aircraft: A319s will be introduced initially via easyJet's Geneva base from August 2003 operating under easyJet's Swiss air operator's licence Eventually both the Airbus A319s and Boeing 737-700s will be interchangeable on all easyJet routes maintaining the "any aircraft, any route" aspect of the easyJet business model. Stelios Haji-Ioannou, easyJet Chairman, said: "As easyJet's largest single shareholder, I was faced with the dilemma of either following the conventional wisdom in the marketplace in order to keep shareholders happy in the short term, or doing what's right for all shareholders in the long run. "We, at the Board, decided to do what's right. We refused to overpay in order to improve the stock price in the short term. It should be an offence to mis-use that level of corporate resources. "At the end of the day 'low cost' companies remain 'low cost' by not wasting money. Sticking to old-fashioned fads like 'low cost airlines only fly Boeing' does not reduce costs. This order is big enough to be put to a vote by all shareholders. I will personally spend a lot of my time over the next couple of weeks along with the CEO and the Chairman-elect talking to our shareholders in order to explain the benefits of this deal. Having looked at several reference points on aircraft pricing including our own 44 Boeings, the offers Go Fly had received before the acquisition and the Ryanair deal, I am satisfied we have done the right thing by waiting. Having acquired Go Fly, one of the very few other potential buyers of significant numbers of aircraft, we have exploited the contestable market to its full potential. About four years ago, as a small airline we bought 15 B737-700s with no competition. Today, buying 120 aircraft in a competitive market, we can now purchase aircraft at approximately 30% per seat below the prices, adjusted for inflation, we achieved then. "I have also followed the great success JetBlue have experienced with the Airbus product in the US. It offers an excellent, comfortable cabin for passengers, exceptional reliability and low fuel burn. The wider aisle also means faster boarding and deplaning, and therefore quick turnarounds. We also like the sizing of the A320 family, which allows us to graduate up to the 180 seat A320 and even 220 seat A321, if we choose to do so in the future." Ray Webster, easyJet Chief Executive, said: "After exhaustive research and several rounds of negotiation with both Airbus and Boeing, the Board is convinced that we have achieved a tremendous deal which will produce a step-change reduction in our cost base. "Airbus has demonstrated an enthusiasm to do business with us which is unmatched in my experience. "We believe that the overall deal which they have offered us, together with their willingness to support the costs of introducing a new aircraft type to our fleet far outweigh the costs of the complexity of running a dual fleet." Noel Forgeard, President and Chief Executive of Airbus, said that he was immensely gratified with easyJet's decision: "The A319 will do an outstanding job for easyJet, providing its passengers with more comfort, higher reliability and, with its unbeatable operating economics, the opportunity for lower fares. We are very excited at entering into a long term partnership with one of the world's most dynamic, low cost airlines." |
It had to be.......... Airbus wasnt going to let this one pass.
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Big Mistake!:cool:
Its not all about saving money in the short term .Its about reliability and robustness 5 years down the road.:cool: Interesting what rostering and engineering will make of it. City isnt impressed shares down 7.25 p. The order is estimated at 4billion. |
Guess that an Airbus Type Rating is going to be pretty handy over the next few years then!!
:) ;) :D ;) :) |
Best Possible News
easy has taken the bold step rather than the predictable soft option. The bus is up to the job having been used (and abused) in the charter market since Excalibur orderded them in 1992. They were good reliable workhorses then as they will be now.
Well done easyJet!!! |
fly right.
Disagree, most unreliable aircraft on uk register is an airbus owned by a charter airline north of watford.:cool: Political move to gain slots throughout europe is also a consideration behind decision. Particularly, paris and others.:cool: |
mjbd WRONG! Having 4000+ hours on the 320 it gets my vote, reliable, modern and great to fly.
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Unreliable my a**e. That report on the spotty M aircraft was bulls*t. Ay Spotty M we have an open reporting system of Air Safety Reports, it is a safety culture, and in no way has anything to do with reliability. http://www.stopstart.fsnet.co.uk/smilie/stick.gif
Check out the PPrune archives for the threads on G-MONX, you will see the thread completly trashes the uninformed journos. Also see reply on Monacrh Website Spotty M News section. |
.....and even if the report on the Spotty M aircraft is valid, so what. I can show you a few very unreliable Boeing's which may well have been "friday afternoon aircraft builds". You cannot base your argument on one or two specific aircraft in this way.
Besides, we all know there were some reliability problems in the early days, but it's a very mature product now. Well done easy....definitely the right decision for the long term. The 737NG is just a re-warmed version of the old generation aircraft, whilst the Airbus is modern and definitely the aircraft for the future. .....and remember, easy will keep flying a sizeable fleet of -700's, so their original intention of achieving the benefits of a contestible market will be there for a while to come! |
I have flown the Airbus with Excalibur,Airtours and currently with BA. It is a first class aircraft with a very high despatch reliabilty and the customers love it.
I remember one trip from Manchester to Palma with 180 pax and the jet only burnt 5 tonnes of fuel. Yes we had a tailwind but nothing exceptional. It is a very efficient aircraft and it has proved its value over the years with numerous charter operators. Does anyone think there may be a signing on fee next year with Easy? Get your Airbus rating asap... Regards BP :) :) :) |
The money men don't like it - EZY shares currently 9.5p off on volume of nearly 90,000 shares.
easyQuote |
I thought the low cost model worked by operating 1 type of aircraft, having 2 types on the fleet pushes up costs.
And one thing for sure 150 seats on a 319 is going to be very very tight! Hell of a lot of aircraft 120...so Air Europe. |
This has to be good news. Reliability has a number of statistics and of course lies. A number of A319 orders have been cancelled since 9/11 and the deal that easy are getting will undoubtedly be outstanding. I am sure that there will be issues for a low cost operator to cope with by introducing a new fleet but they will have done their homework.
Political decision based on slots etc? If that is a contributary factor so what! That's business as well isn't it? What it does offer Easy is the ability to quickly open up their route structure - especially if they go to the 321 to longer distances and more importantly capacity for hardly any additional cost, the yield would be greater or the seats maybe even cheaper. Despite that though during most of the year you could easily fill a 747 on routes like Malaga, Faro and Alicante, so it would make sense to use bigger aeroplanes on these established routes and all on the same type rating! The future of the business has changed in a number of ways but seeing orders like Ryan and Easy have placed does at least mean that there will be pilot jobs. How often do you see orders for this number of aircraft from established 'old school' operators nowdays - not very often, only the 'new boys' are doing it and for the pilot workforce who have been battered over the last 12 months this has to be excellent news. The actual implementation dates etc are still to be announced in detail but i for one am quite enthused by it. I am watching this space - My own future might even be orange!! :) ;) :p ;) :) |
Bigpants et al, just wondering what were the turnaround times with the Airbus?
Are 25 mins turnarounds realistic with the bus? Although this is obviously not a probelm at LTN as they seem to be nearer to the hour at the moment!! |
Stock market drop not unexpected, city wants confirmation about how the purchase will be financed. If another rights issue in the pipeline, then price will be negative for a bit.
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120 aircraft, more than a 120 jobs! Too easy!
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Bite.
We are comparing b737/a319 not b757 laddie.:cool: khabsman. My experience was flying a b767 to replace a broken Airbus in the Middle east for Gulfair. The Bus just fell appart due to high temperature and conditions. Main failures were ac systems and hydraulics[often using alt system to get the gear down]. Happy now.:cool: Plus crashed in crosswind takeoff at abu dhabi,and went swimming in the Gulf on its way into Bahrain.:cool: But then again youve only operated around europe so what do know. |
Hmm, seems obvious that running two types concurrently will increase costs. I'm a bit shocked that Easyjet estimate the A319 to be 10% cheaper to operate than the 737s. I don't believe it, personally, but that's politics for you.
Easyjet will just have to get rid of all those non-strategic 737s. :-) TW |
I think you'll find that easyJet have done a very detailed financial comparison between the two types and will have taken all the concerns mentioned in these posts into consideration. On the basis of the negatives they will have built in "risk costs" of going with Airbus instead of the known costs for Boeing, with this figure they will have gone to Airbus and sought a price for the aircraft which will cancel out the risk and on top of that obtain guarantees for things like maintenance etc. The 10% reduction in cost/ASK will be based on these figures, and believe it or not, they will make sure Airbus delivers.
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Good news for Boeing.
Airbus sells at a price rumoured to be at break even or at slight loss per a/c which means the EU are propping up this deal or are they goingto bump up the price for the larger a/c which will mean carriers looking at "cheap" Boeing? Airbus capacity now to accept any new orders is now tight to say the least (read: cannot accept any further big orders for 318/9/20). Boeing can now fulfill orders more easily. |
Does this mean that EZY will finally be able to land in the fog at Luton in the winter months, rather than diverting to STN and surrounds while the likes of Monarch and Britannia merrily trundle on in with their CATIIIb approaches?
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I agree with brabazon....this has been a very thorough study. The analysis has been entirely based on cost and political issues such as slots were not an issue.
With a multi-base operation such as eJ, the "complexity" of operating two types is not insurmountable. Key bases (starting with GVA, then moving onto.....LGW, STN, etc.???) will no doubt transition one at a time to an Airbus operation, with crew training etc. taken into account. This has all been factored in, with allowance made for 'complexity costs' etc. eJ will still be operating a very sizeable fleet of 737's....the fleet size of that will still give considerable benefits. The traditional cost model of sticking to one aircraft type becomes invalid if a new (and better) product comes along.....do you stick with the old type even if your detailed study says this is the wrong thing to do? This gives the opportunity to negotiate the best supplier deals....not just for the aircraft but maintenance, support, etc. rather than being held to ransom by a single supplier. Compared with the 737-700 the A319 offers a wider, more passenger-friendly fuselage, same or better seat-pitch throughout, etc. Wider aisle and bigger overhead lockers means quicker pax boarding and disembarking. Size and geometry of the holds means baggage loading is as fast or probably faster. (Bear in mind the 737-700 is high enough to warrant a beltloader in most stations, so the higher holds of the A319 is not an issue.) All in all a better aircraft, a very good financial deal, increased passenger appeal, turnround times same or better, a multi-base environment where the type can be introduced progressively on a base-by-base approach, etc. etc. Sounds like a winning formula to me. (....and a nice little fold-down table for the packed lunch!) |
When the final envelopes were opened, the A319 came in £100 million cheaper, thats why easyJet had to buy it (and why Stelios is so delighted). Since no airbus yet built has taken a pounding with a dozen takeoffs and landing a day on the sectors we operate, it will be interesting to see how they do hold up. Knowing that theyt are now committed to buying 120 aiframes should help the pay negotiations for the pilots, because under present conditions they will never get enough guys to fly them!!:cool: :confused: :eek: :D :o
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Its great to see the instant experts come out of the woodwork to dispense their wisdom to us lesser mortals.
Do you gloom & doom merchants really think EZY would go ahead with such an order without having researched it thoroughly and have some backup/guarantees from Airbus. This is great for European jobs, maybe even those of you who knocked the low cost airlines might think again, then again I hope you dont bother !. MJBD if you spent anytime in GF you will know that the 320 was/is a great workhorse for GF, the 340 had the major teething problems, and the 2 incidents you quote, well how can you blame the a/c for that ?!!!!:rolleyes: |
In Trim, most of what you've said, I was going to say.
Having worked for an operator who made the same change, all these arguments were brought up at that time. Issues such as Airstairs (or not), baggage holds that are too high, engineering problems etc, are all important, but being selfish about it, it is ALL good news for the pilots. Get the type rating, get the experience and then leave fi you want to. Just don't let them bond you and make sure you get the package right. By the way, the Airbus is worse on dispatch reliability (with my airlie anyway).....trust me. Regards |
No flare ,
I was merely highlighting these accidents which have happened on Airbus{none on b767 or tristar}. Plus before you come up with the usual argument an expat was on one of those flights. I am merely stating what the a320 reliability was like over the 4 years I was there. Anyway ,it will all come out in the wash.:cool: |
A shiny new Airbus An EMA base, May be a pay increase. Life looking a bit better!
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And that's just the bmi pilots :D
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No news on engine choice yet?
WT |
WT
No, you'll have to wait a few more weeks for that. |
Engine choice? Christ, I thought you had to buy TWO per airframe! This is taking low cost too far......
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Not air europe tigger. easy are largely filling their aircraft every day. Evidently about 80-85 pax per sector average is the break even load factor. Most all flights operating with 130+pax. Even the crack of dawn and late night ones!.
The bus IS reliable. I also have 4000+ hours on the 20/21 in several different companies and the reliability is there. Airbus is bending over backwards in many directions to "facilitate" the 319's into service. Thus the financial risk should be about the same as with a Boeing re-order. And also, when it comes time for the next purchase this keeps both airfraimers honest. No complacency here with easy's preference. Again well done! |
Who Cares. Expansion = jobs.
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Well it looked like an interesting subject for a couple of posts, until the aggro brigade got on it. Let's see if we can get back on track...
Very nice for the GVA operation who have been having to stay on the -300, while the -700 was being introduced in the UK. And - who knows if this won't let some force-retired Swissair guys get a look-in on the home turf (and incidentally free up qualified 737 guys to help out in LTN?) I would have said that it was just what was needed to inject some nouse and pride into easy again - the posts above make me wonder - can they really be what they say? |
319/320 nice airplane???
Been flying 319/320 for the last 10 months 2 weeks 12 hours
a load of **** but I must say it is reliable can not wait to get back to Boeing in the new year. |
Excellent news for all of us, and if as some claim, the 319 is not too reliable, good news for the engineering erks as well.
Great news. Great thread. Can't wait for the My Little Ponies at dawn. If that's the maturity that goes with 14k hours TT I hope I never get my ATPL!! Grow up girls. |
Good god, will you guys please grow up, are you really pilots?
This is good news for all pilots of airbus operators, there are a lot of experienced fo's out there, who may well consider moving to Easy for a command. As for reliability, the A320 and A321 have very good despatch reliability, the difference between that and that 737 is negligable. I don't know what the A319 reliability is like, anybody from BA like to comment? There will definitely be a disadvantage to having no airstairs, but if easy keep on top of their handling agents it shouldn't prove to be too much of a problem. As for the share price, I think that you will find that it is usual for the value of a company to go down when it makes a large purchase. It has nothing to do with lack of approval from the market. The things that I would be most worried about are: 1. They are going to need a lot of staff for this enormous expansion. They are struggling now to find crews, ground agents, baggage handlers, check in staff etc. as it is. Where the hell are they going to come from? Imagine the scenario, in order to attract all these staff, eJ have to increase pay and conditions (especially for Pilots, Cabin Crew, Engineers and Ops) therefore costs go up, therefore ticket prices go up, therefore eJ become less competitive and BA and BMi start to do better again. Could eJ become a victim of it's own success? 2. Is there REALLY a market for all these additional flights? When does easy reach its saturation point? Always be wary of a company that expands quickly. We certainly live in interesting times. |
Jumbo,
Did you do a course in house ,or down at toulouse. What was it like?:cool: |
Seat pitch at 156 capacity?
As a regular passenger in our A319's ( I'm a commuter) I am a bit perplexed as to how easy are going to get an eventual 156 pax in! The BA aircraft are in 126 config and I wouldn't say leg room is generous. Are they planning to delete galleys and toilets?
Reliability seems good but they are all brand new - one publicised engine prob with a BHX based aircraft but no other stories yet. One question for easy planners - are you going to stick with containerised luggage or specify the hold modification for lose stowage like Boeing?? |
Reliabilty & Turnarounds
1) The new 319's/320's are the most reliable new aircraft BA have ever bought (%despatch reliability) 2) No probs with quick turnarounds - brakes on today into XXX at XX.31, brakes off at XX.56 without breaking sweat. |
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