Republic commits to 80 a320 neo family aircraft

[stratus72]

A strong endorsement of the newest evolution in the Airbus fleet came today with the announcement of a new memorandum of understanding (MOU) for 40 A320 New Engine Option (A320neo) aircraft and 40 A319neo aircraft from Republic Airways Holdings, Inc., the parent company of U.S.-based Frontier Airlines.

The commitment from Republic, announced today at the Paris Air Show, makes the company a launch customer for the A319neo. Republic subsidiary Frontier currently operates 58 Airbus A318, A319 and A320 aircraft.

Republic has selected CFM International’s LEAP-X engine for all 80 of their new A320neo and A319neo aircraft. The aircraft also feature large wingtip devices known as Sharklets. Together, the Sharklets and LEAP-X engines will result in a 15 percent fuel burn reduction, corresponding to an annual carbon dioxide reduction of 3,600 metric tons per aircraft.

This order is a reflection of the strong and mutually beneficial partnership Frontier and Airbus have enjoyed over the past decade,” said Bryan Bedford, chairman, president and CEO of Republic Airways. “The addition of these state-of-the-art, fuel-efficient aircraft to our fleet will be a major factor in Frontier maintaining its position as an industry cost leader and will allow Frontier to continue to offer travelers low fares despite persistently high fuel prices.”

“Frontier’s tagline, ‘a whole different animal,’ is descriptive also of a corporate philosophy that has kept Republic’s airlines at the top of the game with high-technology, high-efficiency aircraft,” said Airbus Chief Operating Officer – Customers John Leahy. “With this deal, Republic is selecting the neo as a strong growth platform for their Frontier subsidiary. We couldn’t agree more that this is a wise decision.”

Airbus is the leading aircraft manufacturer with the most modern and comprehensive family of airliners on the market, ranging in capacity from 100 to more than 500 seats. More than 10,100 Airbus aircraft have been sold to more than 440 customers and operators worldwide, and more than 6,700 have been delivered since the company first entered the market in the early seventies.

 

[richav8ter]

I wonder how long this order has been in the works?

 

[Grey Ghost]

I thought BB said RAH was broke??? How did they come up with $ to get these?

 

[stratus72]

Frontier is definitely not out of the woods, but this is some positive news. I've seen orders cancelled before...who knows?

 

[Fubijaakr]

An MOU is hardly a commitment.

 

[Grey Ghost]

Its business as usual at RAH!

 

[dougdrvr]

And they haven't recalled a single Midwest pilot..........

 

[taters]

right off the backs of the pilots.....

 

[VISTADRVR]

Print Back to story

Frontier Orders 80 Airbus Jets After Bombardier CSeries Deal

By Mary Schlangenstein and Andrea Rothman - Jun 22, 2011
Frontier Airlines parent Republic Airways Holdings Inc. (RJET) agreed to buy 80 upgraded Airbus SAS jets, adding planes similar to the Bombardier Inc. (BBD/B) CSeries model that the carrier ordered just last year.
The letter of intent is for 40 each of the A320neo and A319neo aircraft, Indianapolis-based Republic and Airbus said today in a statement. The purchase of 40 CSeries planes “remains in place,” and the company isn’t ready to talk about how the fleets will mesh, said James Reichart, Frontier’s vice president of marketing and sales.
Republic’s agreement to add the Airbus planes, which have a value of about $7 billion at list prices, comes as it pursues a $120 million restructuring plan for Frontier after buying the Denver-based airline out of bankruptcy in 2009. Frontier pilots approved money-saving concessions last week.
“It is an effort to get Airbus some publicity and for Republic to get some positive publicity,” said Bob McAdoo, an analyst at Avondale Partners LLC in Prairie Village, Kansas. “It doesn’t commit anybody to anything and has no short-term financial impact.”
Airlines typically make small deposits years ahead of taking delivery of new planes to lock in their spot in the production cycle, with the bulk of the price due a few years before the aircraft is made.
Financing Issues

McAdoo said it wasn’t clear how Republic would be able to buy Airbus neos after agreeing to buy 40 CSeries planes in February 2010 with a value of $3.06 billion. “The company says they question their own financial outlook,” said McAdoo, who rates Republic shares “underperform.”
The airline isn’t in a position to talk about financing yet, Reichart said in a telephone interview.
Republic fell 9 cents, or 2 percent, to $4.49 at 12:40 p.m. New York time in Nasdaq Stock Market trading. Bombardier slid 22 cents, or 3.1 percent, to C$6.81 in Toronto, after dropping as much as 4.6 percent, the most intraday since May 3.
Asked whether Frontier employees might be offended at being asked for concessions as the company places a large aircraft order, Reichart said:
“The employees understand that we’re doing the hard work right now to make this business viable in such a way that we can produce positive returns even with the current fleet at very high fuel prices. Couple that with a growth platform with a much more fuel-efficient aircraft and that makes for a pretty bright future for Frontier.”
The Frontier Airline Pilots Association didn’t immediately respond to a message left at its office in Denver.
Funding Plan

Republic plans to raise $70 million in new liquidity for Frontier. Reichart declined to provide any details on the plan or when it would be voted on by the company’s board.
The A320neo lists for about $91.2 million and the A319neo for about $83.9 million on a pricing sheet from Toulouse, France-based Airbus. Airlines typically buy at a discount.
Frontier has a fleet of 54 Airbus jets, according to its website. Buying Frontier expanded Republic’s main business of making regional flights for larger carriers such as United Continental Holdings Inc.
Similar Size

Last year’s order from Montreal-based Bombardier is for the CS300, the larger, 145-seat version of the CSeries, meaning the planes are similar in size to the Airbus models. Republic also has options for 40 more Bombardier aircraft.
Today’s letter of intent with Airbus would make Republic the first buyer of the A319neo, a variant of the existing A319 that will have newer, more fuel-efficient engines.
As the CSeries endured an order drought of more than a year before its planned debut in 2013, Bombardier had been defending the plane by saying its chief competitor was the A319, a model no one had purchased.
“We have a firm order from Republic which were very proud of,” John Arnone, a Bombardier spokesman, said today. “Different types of aircraft co-exist in airline fleets all the time. Republic is a valued CSeries customer.”
To contact the reporters on this story: Mary Schlangenstein in Dallas at [email protected]; Andrea Rothman in Paris at [email protected]
To contact the editors responsible for this story: Benedikt Kammel at [email protected]; Ed Dufner at [email protected]


®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.

 

[SizzleChest]

And they haven't recalled a single Midwest pilot..........

Still have to wait for the IMSL to become effective in august. Besides, you don't want what is going to be offered.... just ask the guys who are already there.

 

[Fubijaakr]

Repeat after me:

“It doesn’t commit anybody to anything and has no short-term financial impact.”

But you gotta love it when pilots get all jazzed up about MOUs.

 

[Flying the Line]

Republic/Frontier merely needed some "good press" and needs to somehow convince potential investors to sink money in to the endeavor. You can't come out and say we shrinking!! invest money in us.

 

[Flyby1206]

McAdoo said it wasn’t clear how Republic would be able to buy Airbus neos after agreeing to buy 40 CSeries planes in February 2010 with a value of $3.06 billion. “The company says they question their own financial outlook,” said McAdoo, who rates Republic shares “underperform.”

That says it all

 

[richav8ter]

Bedford. It's fun to watch this guy work, when your not in contract negotiations with him. Oil has been above $100/bbl and Frontier has been losing some money, so he preaches doom, gets his pilots to agree to some wage freezes and benefit cuts. (More power to the Frontier pilots, do what you feel is good for ya'll). Takes the poor hat to GE and Airbus gets them to cut near term expenses for a promise to buy 80 jets starting in four years. Now oil already down to $95 a barrel, and he has spots as the launch costumer for the C300 and the Airbus 319NEO. If either program (airplane or engine) falls short he can just take the other aircraft. If both do well he can sell positions for which ever one he doesn't like. It's almost artful.



I ,however, am still making $37/hr with no upgrade in sight.

 

[bizicmo]

Get pilots to agree for wage decreases in return for equity in the company. Then price a secondary offering to raise capital for the planes, diluting the current equity holders. That's if they can get anybody else to sink money in.

 

[kommutrdog]

And they haven't recalled a single Midwest pilot..........

And they won't.

Midwest's OWN ALPA MEC SOLD THEIR OWN PILOTS DOWN THE RIVER in order to keep their jobs.

You had to be on Midwest property and actively flying when the ax fell. If you were furloughed, tough sh*t...you lose.

Gotta love that ALPA brotherhood.

ALPA's new motto: "F-You. I got mine, you get yours."

 

[Fubijaakr]

Bubblehead,

You are an embarrassment.

 

[248to2.8]

And they won't.

Midwest's OWN ALPA MEC SOLD THEIR OWN PILOTS DOWN THE RIVER in order to keep their jobs.

You had to be on Midwest property and actively flying when the ax fell. If you were furloughed, tough sh*t...you lose.

Gotta love that ALPA brotherhood.

ALPA's new motto: "F-You. I got mine, you get yours."

Damn right. And then I get a letter from ALPA saying "We audited your account while at Midwest, and we didn't charge you enough while we were busy giving your job to another union". Or something close to that. Now I owe back dues. wtf.

 

[trainer8]

Get pilots to agree for wage decreases in return for equity in the company. Then price a secondary offering to raise capital for the planes, diluting the current equity holders. That's if they can get anybody else to sink money in.

You missed "file with the NMB asking to delay the current/ongoing representation election to delay STS status."

Yup, BB filed yesterday.

 

[$$$4nothin]

Maybe the fact that BB got the Frontier pilots to take consesions one day, and goes out and tries to pick up 80 new planes the next will be what it takes for the F9 guys to see how ********************ty of a person BB an Co. are. I hope all of you F9 guys get what you want. You sure as hell seem eager to cooperate with whatever BB wants. You will see where that gets you. Not that it matters. Based on what I see in MKE on a weekly basis, the experiment that is the Frontier operation is toast by years end. There just simply will not be enough pilots to staff the airline, or costumers paying high enough ticket prices to keep it going. You can't treat people that bad for that long with that much competition at all of the F9 hubs and expect people to keep paying premium prices. Not to mention hubs that require deeiceing almost every airplane everyday for 3-4 months straight. I did several 4 days last winter that included 7 deiceings a day for 4 days straight. Hard to make money that way.