Airbus secures its biggest ever deal with order worth £38bn
PLANEMAKER Airbus has signed its biggest ever airliner deal with an order for 430 new aircraft – and quickly followed it up with another deal for 90.
It’s hugely positive news for Airbus at a time when uncertainty clouds the future of its A380 superjumbo and it has been facing stiff competition in world markets from its American rival Boeing.
The £38bn order for 430 A320neo and A321 aircraft comes from US private equity fund Indigo Partners on behalf of four low cost airlines in its portfolio.
Indigo Partners is a Phoenixbased private equity firm which owns Frontier Airlines and part of Volaris.
It is managed by William Franke, a pioneer of the cheap tickets and high fees airline business model that has spread overseas and is growing in the US. The airlines that use the aircraft will include Frontier Airlines, based in Denver, JetSMART of Chile, Volaris in Mexico and Wizz Air of Hungary.
A320neos list for US$108.4m (£82m) apiece and A321neos at US$127m (£96m), although airlines and manufacturers often negotiate lower prices for big deals like these.
The wings for the aircraft will be built at Broughton in Flintshire.
The 430-aircraft commitment, which comprises 273 A320neos and 157 A321neos, was announced at the Dubai Airshow by Mr Franke and John Leahy, Airbus chief operating officer customers, Airbus Commercial Aircraft.
When added to existing Airbus A320 family orders, the new agreement will make Indigo Partners one of the largest customers by order number in the world for the Airbus single-aisle aircraft family. Airlines in the Indigo Partners family have previously placed orders for 427 A320 family aircraft.
“This significant commitment for 430 additional aircraft underscores our optimistic view of the growth potential of our family of low-cost airlines, as well as our confidence in the A320neo family as a platform for that growth,” Mr Franke said.
“Our airlines know that a great aircraft coupled with a great business plan will create value for our customers. We look forward to bringing comfort and low fares to more passengers around the world as Wizz Air, Volaris, JetSMART and Frontier continue to expand.”
Mr Leahy added: “Indigo Partners have been a tremendous customer and supporter of the Airbus singleaisle fleet for many years. An order for 430 aircraft is remarkable, but it’s particularly gratifying to all of us at Airbus when it comes from a group of airline professionals who know our products as well as the folks at Indigo Partners do.
“We are proud to augment their airline fleets in Latin America, North America and Europe with the singleaisle aircraftthat offers the lowest operating costs, longest range and most spacious cabin: the A320neo family.”
In a separate deal Dublin-based CDB Aviation Lease Finance (CDB Aviation) firmed up an order for 90 A320 family aircraft.
The company had previously signed an undisclosed purchase agreement for 45 aircraft in 2014, and announced a memorandum of understanding for an additional 30 A320neos and 15 A321neos at the 2017 Le Bourget Paris Airshow in July.
“By confirming today’s order for 90 A320neos, we have doubled our overall order position for the aircraft family. CDB Aviation is now well positioned with a leading order book for the latest technology narrowbody aircraft to realize our aggressive fleet growth plan and further strengthen our ability to serve airline customers around the world with narrowbody fleet requirements,” said CDB Aviation president and CEO Peter Chang.
Airbus’ biggest previous sale came in August 2015 when it sold 250 A320neos to Indian budget airline IndiGo, a deal estimated to be worth £20bn at list prices.
IndiGo and Indigo Partners are separate firms with separate management. The latest orders come just days after Emirates, the biggest customer for the A380, said it would not buy any more of the aircraft until Airbus made a commitment to the superjumbo’s future.
Instead, the airline announced an order on Sunday for rival Boeing’s 787 Dreamliner in a £11.4bn deal, the only major deal announced at the Dubai Air Show until yesterday.
Airbus has pinned hopes of continuing production of its A380 double-decker jumbo jet on Emirates, the world’s largest operator of the aircraft. Reports circulated before the air show that a major A380 sale would be coming.
Airbus employees even filled a news conference on Sunday, expecting the A380 sale, instead to find state-owned Emirates making the deal with Boeing in front of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum.
Emirates now relies solely on the Airbus 380 and the Boeing 777, making it the largest operator of both. It has 165 of the 777s in its fleet and took possession of its 100th A380 earlier this month.