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Easyjet to buy 75 aircraft
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January 7, 2002: 3:15 a.m. ET
Europe's No. 2 budget airline talks with Boeing, Airbus for $4B order
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LONDON (CNN) - Easyjet, Europe's second-biggest low cost airline, said on Monday it was in talks to buy 75 new aircraft.
The order, valued at about £2.7 billion ($4 billion), will be the largest order placed by a budget carrier in Europe.
Easyjet is in talks with Boeing of the U.S. and European rival Airbus about the order to be delivered by 2007, as the airline expands its capacity by 25 percent a year.
"Nominally, the discussions concern the possible acquisition by Easyjet of 75 additional aircraft -- this number may change during the course of the negotiations," said the company.
Low-cost airlines, like Easyjet (EZJ), Ryanair (RYA) and Go, are expanding their fleets as demand continues to grow, even as traditional national flag carriers cut routes, ground aircraft and jobs to counter the impact of an economic slowdown and the effects of September 11.
Go, Britain's third-biggest budget airline, announced last week passenger traffic soared 57 percent, while Europe's biggest airline British Airways and No. 4 KLM posted a 10 percent decline in passenger traffic in December.
Easyjet's move to enter into talks with Airbus is a departure from the low-cost airlines model formulated by America's Southwest Airlines, to use a single supplier to lower costs.
Its talks with Airbus could be a ploy to force Boeing to lower its prices, the Financial Times said.
"While commonality of fleet is an important component of the Easyjet business model, we feel it is appropriate to consider all options... the Airbus A319 has not previously been operated by Easyjet or other low-cost aurliens as its original capacity was limited to 145 seats - against the 149-seat Boeing 737-300/700," said chief executive Ray Webster.
Webster said Easyjet had been informed the Airbus A319 will be available with 150 seats, making it more competitive.
Easyjet's move to buy new aircraft contrasts with the strategy of Ryanair, Europe's biggest low-cost airline, which is looking for 50 secondhand Boeing 737s.
Easyjet's stocks rose 1.9 percent to 478 pence in early London trading on Monday. 
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