easyJet agrees aircraft deferral with Airbus

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easyJet PLC (LON:EZJ) said it has agreed with Airbus the deferral of aircraft deliveries from financial years 2022, 2023 and 2024.

This means that a total of 22 aircraft will be moved to financial years 2027 and 2028, while 15 delivery dates within the period 2022-2024 will be moved to more closely match forecast seasonal requirements.

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The budget airline stressed that all aircraft purchased under the terms of the original 2013 Airbus agreement are subject to a discount from list price, which remains unchanged.

Within the 2013 agreement a price escalation mechanism is used to reflect market inflation in labour and material costs and as such the future aggregate cash price of the aircraft subject to deferrals will increase.

The changes also result in a re-phasing of the pre-delivery payment cash flows of the group’s order book due to the later dates of delivery.

The flight carrier had the option until the end of 2020 not to take up to seven aircraft scheduled for delivery between 2022 and 2026, so it has now agreed with Airbus to reallocate the aircraft to which this option applies, with seven aircraft due for delivery in 2025-2026, and the deadline to exercise this option amended to December 2021.

As a result, easyJet will take no Airbus deliveries in financial year 2021, eight in 2022, seven in 2023 and 18 in 2024, with no change to the total number of firm Airbus A320 NEO family aircraft outstanding orders.

easyJet said it has retained options to increase its deliveries in financial year 2023 to 30 aircraft, reflecting an acceleration of deliveries from future financial years. This option to accelerate is subject to Airbus’ normal commercial and industrial constraints and is exercisable by December 31, 2021.

“This latest amendment to our longstanding agreement with Airbus reflects easyJet’s significant fleet flexibility as well as the benefit of highly attractive aircraft pricing,” said easyJet chief executive Johan Lundgren in a release.

“In this period of uncertainty, this flexibility is even more valuable, as it will enable us to quickly flex our fleet size in response to customer demand,” he added.

Shares rose 4% to 790.8p on Tuesday morning.

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