EasyJet agrees to buy 56 Airbus A320neo jets

LONDON, June 21 (Reuters) – EasyJet (EZJ.L) will purchase 56 Airbus A320neo plane and convert a earlier order to 18 new A321neo plane, the British airline mentioned on Tuesday, fulfilling choices in a 2013 take care of the European planemaker.

The British airline mentioned the proposed order, which is topic to shareholder approval, companies up its order e-book with Airbus to 2028.

Deliveries of the plane, which have an inventory worth of $6.5 billion, will start in easyJet’s 2026 monetary 12 months to switch the service’s older A319 and A320 plane, the corporate mentioned.

Air journey has rebounded strongly because the lifting of COVID-19 restrictions, with European carriers and airports struggling to satisfy demand.

Airbus (AIR.PA) and Boeing (BA.N) are additionally going through challenges in growing manufacturing, with provide chain pressures the most important hurdle.

EasyJet mentioned its order ensures it is going to be capable of change older plane and use extra environment friendly jets that produce decrease emissions and fewer noise, paying considerably lower than the listing worth due to concessions granted within the 2013 settlement.

The planes will probably be funded from money stream, sale and leaseback transactions and debt, it mentioned.

Chief Government Johan Lundgren mentioned the order continued the airline’s fleet refresh, offering further seats and value efficiencies.

“We consider this may assist constructive returns for the enterprise and the supply of our strategic aims,” he mentioned.

Shares in easyJet reversed early positive factors to commerce down 5% in early afternoon offers.

AJ Bell funding director Russ Mould mentioned congestion at British airports might need prompted easyJet to cancel extra flights all through the summer time, nevertheless it had not dampened its urge for food to be a a lot greater participant long run.

“There may be strategic logic to the deal, however easyJet should first get hold of approval from shareholders who may be feeling offended at how its share worth efficiency has been weak this 12 months,” he mentioned.

In December 2020 easyJet agreed with Airbus to defer some deliveries of plane underneath the 2013 deal as a result of the COVID-19 pandemic had put its funds underneath extreme strain.

The Airbus order had proved a supply of dispute with easyJet’s largest shareholder, Stelios Haji-Ioannou, who had opposed the funding on the peak of the pandemic.

Reporting by Paul Sandle; enhancing by Kate Holton and David Goodman

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