On Tuesday, easyJet announced that it had reached an agreement with Airbus for deferral of deliveries. The struggling low-cost carrier will, as previously decided, not take any planes at all in 2021. Furthermore, it is now decided that 22 of the jets on order will arrive up to five years behind the intended schedule – and at a higher price.
Recently reporting the first-ever loss in its 25-year history, UK low-cost carrier easyJet has now agreed with planemaker Airbus to defer additional aircraft deliveries. The airline said Tuesday that 22 of the aircraft meant to be delivered from 2022 to 2024 would only arrive with the fleet from 2027 to 2028.
Deferred deliveries equal higher price
While this arrangement will save easyJet much-needed cash in the short-term, in the long run, it will end up costing the carrier more. The airline confirmed to Reuters that under the terms of its 2013 agreement with Airbus, the future aggregate cash price would increase for the aircraft subject to deferral.
The arrangement also includes the move of 15 delivery dates in the period of 2022 to 2024. While no exact details have been provided, these will shift to better “match forecast seasonal requirements.”
Altogether, the changes combined with previous agreements mean that easyJet will take zero deliveries next year. However, after that, it will take seven in 2022, eight in 2023, and back to a more substantial 18 in 2024.
Option deadline gets a one-year extension
The option not to take seven of the planes scheduled for delivery between 2022 and 2026 has been transferred to aircraft scheduled between 2025 and 2026. The deadline for the option initially set for December 31st, 2020, will be extended by one year.
“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,” easyJet CEO Johan Lundgren told Reuters.
Simple Flying has reached out to easyJet for direct comment on the arrangement but was yet to receive a response at the time of publication.
An order the source of much conflict
This is not the first deferral agreement between the two parties. easyJet was meant to take delivery of ten A320neos this year, along with another 12 in 2021 and an additional two in 2022. A deal to push back those deliveries by a full five years was reached in June.
These aircraft are all part of easyJet’s 107 strong Airbus order from 2013. The deal, from which easyJet has already received 45 jets, has been the source of much contention among the budget carrier’s leadership.
The airline’s founder, Sir Stelios Haji-Ioannou, has repeatedly attempted to have the order canceled. This has led to a whole array of knock-off effects in the upper echelons of easyJet management. The most dramatic was perhaps when its founder unsuccessfully sought to oust the airline’s CEO back in May.
What do you think of easyJet’s new delivery time-table? Is it reasonable given forecasted demand over the following years? Let us know your take on it in the comments.