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.