February 18, 2013 8:05 pm

EasyJet considers all-Boeing fleet

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EasyJet is weighing an aircraft order that would eventually return its fleet to one composed entirely of Boeing jets, a move that could raise tensions with the low-cost carrier’s founder.

The airline is in the middle of competitive dialogue with the US manufacturer and its main rival Airbus, about a significant expansion of its fleet.

Carolyn McCall, chief executive, said that if easyJet were to go ahead with an order, it would be aiming for a single-manufacturer fleet – either by sticking with Airbus, whose A320 and A319 models it currently flies, or by shifting entirely to Boeing jets.

“There would be a transition plan and Boeing would have to obviously work very, very hard on price and would have to cover some of the costs of being a dual fleet for a period of time because the aim would always be to go back to being a single fleet,” Ms McCall told the Financial Times.

This would be one of the most important narrow-body orders by a European airline in recent years should it come off. It will be keenly contested by the two manufacturers, with Boeing particularly eager to poach Airbus customers in order to safeguard its share of the single-aisle market.

But easyJet faces a battle with Sir Stelios Haji-Ioannou, its founder who controls 37 per cent of the shares and believes the group already has too many aircraft. “Our analysis suggests planes in the off-peak months are either idle or working reduced schedules. Also, it’s a very young and modern fleet. What’s the urgency?” said a spokesman for Sir Stelios.

The company currently operates 213 aircraft, about three quarters of which it owns, with the remainder on operating leases. Last year it flew its last Boeing aircraft, completing a decade-long project of shifting entirely to Airbus jets.

Flying a single-manufacturer fleet saves on staff training and maintenance costs and allows greater crew flexibility. But it can sap an airline’s bargaining power when it is seeking new aircraft, and reduce its flexibility when offloading jets on the second-hand market.

“We are deadly serious about that competition between the two manufacturers and Boeing knows that. They will work very hard for our business,” said Ms McCall.

A shift back to an all-Boeing fleet would likely involve as many as 100 firm orders as well as a large number of options – which guarantee prices and delivery dates – and purchase rights, which only guarantee prices. That would allow easyJet to fix the costs of eventually trading out all its Airbus jets in favour of Boeing models.

But a Boeing order would not necessarily involve more options and purchase rights than one with Airbus, since the airline might be intent on eventually transferring its fleet entirely to next-generation aircraft such as the Airbus Neo, set to enter service in 2015.

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