easyJet plc (EZJ) Proposed purchase of aircraft 21-Jun-2022 /
07:00 GMT/BST Dissemination of a Regulatory Announcement,
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
This announcement contains inside information
For immediate release
21 June 2022
easyJet plc
Proposed purchase of 56 Airbus A320neo family aircraft and
conversion of 18 A320neo family aircraft to 18 A321neo aircraft
easyJet plc ("easyJet" or the "Company") today announces that it
has entered into conditional arrangements with Airbus S.A.S.
("Airbus") under which Airbus has agreed to supply 56 A320neo
family aircraft for delivery between FY 2026 and FY 2029, utilising
purchase options and purchase rights under the existing contract
with Airbus (the "Airbus Amendment" and the existing contract with
Airbus being the "2013 Airbus Agreement"). In addition, the Company
proposes to convert 18 A320neo aircraft planned for delivery
between FY 2024 and FY 2027 to 18 A321neo aircraft deliveries. The
Company has also entered into conditional arrangements with CFM
International S.A. ("CFM") to ensure that the commitments given
under the current engine supply agreement between the Company and
CFM will cover aircraft delivered under the Airbus Amendment (the
"CFM Amendment", together with the Airbus Amendment, the "Proposed
Purchase").
The Proposed Purchase firms up easyJet's order book with Airbus
to calendar year 2028, continuing the Company's fleet refresh, as
the 156 seat A319s and older A320s (180 and 186 seat) leave the
business and new A320 (186 seat) and A321 neo (235 seat) aircraft
enter providing up gauging, cost and sustainability enhancements to
the business. The directors believe this will support the delivery
of our strategic objectives and provide the aircraft to help build
strong shareholder returns.
This purchase will:
. Secure Certainty of Aircraft Supply: Airbus delivery slots are
increasingly scarce, with no slots being available until 2027. By
securing delivery slots now, easyJet ensures future deliveries
between FY 2026 and FY 2029 to replace aircraft leaving the fleet.
The Company and its group's ability to maintain desirable slots and
sustain its route network depends on the timely delivery of
aircraft.
. Maintain Operational Scale: The new aircraft will be used to
replace older aircraft as they reach the end of their useful life.
These aircraft will become economically unviable for our high
intensity low-cost operation and will need replacement if we are to
maintain the current scale of our business.
. Utilise the Benefits of the 2013 Agreement: The new aircraft
will be purchased under the 2013 Agreement, meaning the Company
will continue to benefit from the highly competitive pricing and
the flexibility rights in this agreement. These aircraft are priced
very substantially below the Airbus list price, and benefit from
attractive price escalation protection. In addition, the Airbus
Amendment continues to offer flexibility with respect to delivery
dates and the ability to convert A320neo aircraft to A321neo
aircraft.
. Benefits of New Generation Technology: The new aircraft will
continue the modernisation of the easyJet fleet. The new aircraft
will deliver between a 15% and 25% unit cost fuel efficiency
improvement (depending on which aircraft they replace). This will
significantly reduce easyJet's fuel costs and therefore improve our
overall cost base. It will also reduce the costs of compliance with
various environmental regulations. The costs of carbon emissions
will increase significantly over the next few years, and increased
fuel efficiency will lead to a proportional reduction in carbon
emissions. Additionally, some airports provide discounted fees for
new generation aircraft, further enhancing the economic
benefits.
. Increase Aircraft Size: The new aircraft will also facilitate
further up-gauging of the fleet - increasing the average seat count
per aircraft of the easyJet fleet. This is achieved through some of
the new A320s (with 186 seats) replacing smaller A319s (with 156
seats) and 180 seat A320s. Further up gauging will also occur as a
result of additional A321neo aircraft (with 235 seats) being
introduced into the fleet. This will result in further improvements
in cost efficiency, with the costs of each flight spread across a
greater number of passengers. The A321neo is a highly
cost-efficient aircraft, well suited to higher demand or longer
sector length parts of the Company's network.
. Sustainability Benefits: The new aircraft are aligned with
easyJet's sustainability strategy, with the adoption of the more
efficient new technology aircraft being a core component of
easyJet's path to net zero emissions. Alongside this, the new
aircraft are significantly quieter, with half the noise footprint
of the older aircraft they are replacing.
The directors believe the proposed purchase supports the
delivery of easyJet's overall strategic objectives. Given
constraints on Airbus delivery slots, should the Proposed Purchase
not proceed, easyJet would not have a secure supply of aircraft
between FY 2026 and FY 2029 and would therefore need to either
decrease its fleet size or source alternative new generation
aircraft with higher ownership costs. If instead easyJet sourced
aircraft from the secondary market, this may expose easyJet to
older technology. easyJet would face greater exposure to
fluctuating fuel prices and carbon related taxes and would be
competitively disadvantaged relative to the more modern fleets
operated by its competitors. In addition, easyJet would be delayed
in achieving its sustainability and net zero emissions
objectives.
The Proposed Purchase would substantially complete the 2013
Airbus Agreement with Airbus whilst also securing delivery slots
between FY 2026 and FY 2029 to replace aircraft leaving the
fleet.
At 2018 average list prices for the Airbus aircraft (the latest
year for which Airbus has published list prices for the relevant
aircraft), the aggregate purchase price for the Proposed Purchase
would be approximately USD6.5 billion. The aggregate actual price
for the aircraft will be very substantially lower because of
certain price concessions granted in connection with the 2013
Airbus Agreement.
The aircraft associated with the Proposed Purchase will be
financed over a number of years through a combination of easyJet's
internal resources, cash flow, sale and leaseback transactions and
debt. While the Board will regularly review optimal sources of
financing, there is currently no expectation that shareholders will
be asked to fund any aspect of the Proposed Purchase.
Although the Proposed Purchase was already envisaged by the
shareholders when they approved the 2013 Airbus Agreement and
subsequent amendments, in view of its size, the Proposed Purchase
constitutes a Class 1 transaction under the Listing Rules and is
therefore conditional on shareholder approval at a general meeting
of the shareholders (the "General Meeting"). A circular is expected
to be sent to shareholders in due course giving further details of
the Proposed Purchase and containing notice of a General Meeting at
which a resolution to approve the Proposed Purchase will be
proposed.
Johan Lundgren, easyJet Chief Executive said:
"The proposed purchase firms up our orders with Airbus between
FY 2026 and FY 2029, continuing the company's fleet refresh, as the
older A319s and A320s leave the airline and new A320 and A321 neo
aircraft enter, providing benefits to easyJet through up gauging,
cost efficiencies and sustainability enhancements. We believe this
will support positive returns for the business and the delivery of
our strategic objectives."
Contacts
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0)7985 890 939
Adrian Talbot Investor Relations +44 (0)7971 592 373
Media:
Anna Knowles Corporate Communications +44 (0)7985 873 313
Edward Simpkins FGS Global +44 (0)7947 740 551 / (0)207 251
3801
Dorothy Burwell FGS Global +44 (0)7733 294 930 / (0)207 251
3801
About easyJet plc
easyJet plc is a low-cost European point-to-point airline
operating over 900 routes in 35 countries. We employ over 14,000
people and in 2019 over 96 million passengers flew with us.
Our sustainable business model makes travel easy and affordable
and drives growth and returns for shareholders.
Forward-looking statements
Certain information contained in this announcement may
constitute "forward-looking statements", which can be identified by
the use of terms such as "may", "will", "would", "could", "should",
"expect", "anticipate", "project", "estimate", "intend",
"continue", "target", "plan", "goal", "aim" or "believe" (or the
negatives thereof) or other variations thereon or comparable
terminology. These forward-looking statements include all matters
that are not historical facts and include statements regarding the
Company's intentions, beliefs or current expectations and those of
our directors and employees concerning, amongst other things, the
Company's results of operations, financial condition, changes in
global or regional trade conditions, changes in tax rates,
liquidity, prospects, growth and strategies, acts of war or
terrorism worldwide, work stoppages, slowdowns or strikes, public
health crises, outbreaks of contagious disease or environmental
disaster. By their nature, forward-looking statements involve
inherent risks, assumptions and uncertainties that could cause
actual events or results or actual performance of the Company to
differ materially from those reflected or contemplated in such
forward-looking statements. For further information regarding risks
to easyJet's business, please consult the risk management section
in the company's Annual Report (as published). No representation or
warranty is made as to the achievement or reasonableness of and no
reliance should be placed on such forward-looking statements.
(MORE TO FOLLOW) Dow Jones Newswires
June 21, 2022 02:00 ET (06:00 GMT)
Grafico Azioni Easyjet (LSE:EZJ)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Easyjet (LSE:EZJ)
Storico
Da Apr 2023 a Apr 2024
