EasyJet and Airbus have reached an agreement on revised delivery dates for 24 aircraft originally due to arrive between 2020 and 2022.
The delivery of eight of 32 deferred aircraft had already been moved from 2020 to 2022, and easyJet confirmed on Tuesday that the remaining 24 will be delivered between 2025 and 2027.
In a statement, the carrier said the deferrals were ‘a direct response to Covid-19’. It added that the move could increase the future aggregate cash price of the aircraft by up to £95 million, but insisted that would be offset by cost savings.
The statement said: “Within the 2013 (Airbus) agreement a price escalation mechanism is used to reflect market inflation in labour and material costs. By applying this inflationary mechanism, the future aggregate cash price of the 32 deferred aircraft, at their future delivery dates, could increase by up to c.£95 million the large majority payable between FY2025 and FY2027.
“Any increase would be materially offset by the reduced cost of borrowing associated with the significant cashflow benefits in the next 16 months arising from these deferrals (including consequential changes to the schedule of pre-delivery payments).”
The statement added: “EasyJet now has the flexibility until December 2020 to defer two aircraft and the option to not take up to seven aircraft currently scheduled for delivery between FY2022 and FY2026.
“EasyJet has also secured additional flexibility with respect to its existing purchase options of 13 aircraft, by agreeing an extension to the deadline for the exercise of such options from November 2020 to November 2021 (in respect of seven aircraft) and to November 2022 (in respect of six aircraft). These changes complement our pre-existing deferral rights.”
Johan Lundgren, chief executive, said: “I am pleased to confirm the detail of easyJet’s revised aircraft delivery commitments. The 24 aircraft that were originally deferred beyond December 2022, will now be delivered from FY2025 to FY2027, whilst our significant discount from list price remains unchanged.
“We have also agreed further flexibility in relation to deferral rights and future purchase options. The changes agreed defer capacity in the medium term while continuing our long-term strategy of replacing our older fleet with the advanced and lower fuel burning A320NEO family.”
EasyJet’s orders with Airbus have been the subject of a bitter dispute, with founder and largest shareholder Stelios Haji-Ioannou last month failing in an attempt to unseat a number of executives including Lundgren over their commitment to the deal.