November 21, 2012
EasyJet has concluded the technical analysis of aircraft and is now entering the commercial evaluation as the airline tries to determine what its future fleet should look like.
CEO Carolyn McCall told analysts on Tuesday that the company is still considering the Airbus A320NEO, Boeing 737 MAX and the Bombardier CSeries. It has requests for proposals out with all three manufacturers and with CFM and Pratt & Whitney on the engine side.
According to McCall, EasyJet is looking at a 150-seat version of the CSeries. If it went ahead with a Bombardier order, it would go for a mixed fleet of two types, as the airline would then also buy a 180-seat aircraft, either the A320NEO or the 737 MAX. In addition to the longer-term order for a re-engined aircraft or the CSeries, EasyJet also is looking at the more short-term requirements to bridge the period between 2013 and about 2017, which is when the A320NEO or the 737 MAX slots would become available. The airline could convert up to 42 options from its existing A320 order from 2014, says CFO Chris Kennedy. Airbus data show EasyJet has taken delivery of all 172 A319s on firm order and has 15 more A320s scheduled for delivery. Kennedy says the share of the larger A320s will increase to take advantage of economies of scale.
The carrier did not say when it will make a decision on the order and how many aircraft it is considering. Management has been under pressure from founding shareholder Stelios Haji-Ioannou to limit capacity growth. Haji-Ioannou has been arguing that the airline has grown too fast at the expense of shareholder value.
EasyJet also is in the midst of fully rolling out assigned seating. The process is due to be completed by Nov. 27, and McCall argues that, once it is fully implemented, the airline will be able to generate additional revenues. EasyJet will offer three “extra leg-room” rows on the A319s and A320s and four and five “up-front” rows, respectively, that will be more expensive than seats in the rest of the cabin. Extra leg room will be offered in the first row and at the overwing exits.
EasyJet’s profit before tax increased by 27.9% to £317 million ($505 million) in fiscal 2012, ended Sept. 30. Revenues were up 11.6% and reached £3.8 billion. The airline plans to pay a 21.5-pence-per-share dividend, more than twice as much as last year.