Airbus gets mega-order for 255 jets led by Wizz, Frontier
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Airbus gets mega-order for 255 jets led by Wizz, Frontier

Airbus gets mega-order for 255 jets led by Wizz, Frontier

The deal for Airbus’s larger A321 model is valued at more than $30bn before typical industry discounts

Airbus notched a mega-order for 255 narrow-body jets at the Dubai Airshow, bolstering the European planemaker’s case that aircraft demand has started to roar back from the lows of the coronavirus pandemic.

The deal for Airbus’s larger A321 model is valued at more than $30bn before typical industry discounts. It will be parceled out among Wizz Air Holdings, Frontier Group Holdings and two other low-cost carriers that count Bill Franke’s Indigo Partners as their top shareholder, the companies said on Sunday.

Airbus is trying to persuade suppliers to prepare for an acceleration of narrow-body output past pre-Covid 19 levels over the next few years. Yet orders so far in 2021 have been dismal, trailing rival Boeing Co. by two-thirds. The Indigo deal is baked into the planned ramp-up, the European planemaker’s chief executive officer, Guillaume Faury, said at the signing ceremony in Dubai.

“Its a great pleasure to be back on the front foot and looking to the future after the Covid crisis,” Faury said.

Airbus is also in talks with Air Lease Corp. for a major order that would include a mix of narrow- and wide-bodies, Bloomberg reported earlier, citing people familiar with the discussions.

Demonstrating sustained demand is a key part of Airbus’s mission in Dubai. It issued a market forecast on Saturday showing little change in the 20-year outlook from before the pandemic. It’s counting on demand for cleaner jets to drive earlier replacements than it assumed prior to 2019. The majority of the Indigo-ordered plans to be made in Mobile, Alabama, Airbus said.

Sales chief Christian Scherer said Sunday that he needs more planes and would like to see a faster ramp-up than the current target of 65 A320-series jets per month by summer 2023. The pace of acceleration is being held back by the limits on what suppliers can deliver, he said.

Airline optimism
Franke, who was also present in Dubai, said he had an optimistic view of the market and wanted to be early in the process. Indigo will take up some slots that opened when other customers canceled orders, but the bulk of the deliveries will take place from 2025 onwards.

Wizz Air Holdings, the European low-cost carrier targeting market expansion during the travel rebound, will take the biggest share with 102 planes, including 27 of the longest-range XLR variants, according to an Airbus statement.

Bloomberg reported in September that the company was weighing a commitment in that range.

More needed
Budapest-based Wizz Air is still expanding in central Europe, while adding flights in places like Italy, Austria and the UK as weaker competitors pull back. It also started a venture in Abu Dhabi during the crisis, and is looking to grow there.

The company still needs more aircraft in the short-term but it has a few options, including extending current leases by several years to bridge the gap, CEO Jozsef Varadi said in an interview. “I’m quite comfortable we have the tools on hand to be able to deliver on not only the long-term fleet requirements but also the short term,” he said.

The XLR, which will begin delivery in the second half of 2023, will allow Wizz to potentially reach Dubai or Abu Dhabi from London, Varadi added.

Frontier plans to take delivery of 91 jets between 2023 and 2029, when its fleet will reach 272 aircraft including those already on order. The Denver-based airline undertook an initial public offering during the pandemic and has been aggressive in chasing after leisure traffic as it rebounds. Despite difficulties facing some competitors, Frontier has the pilots it needs to operate the aircraft, CEO Barry Biffle said.

Mexico’s Volaris Aviation Holding ordered 39 planes and JetSmart Airlines of Chile took 23, including two XLRs. It will upgrade 38 existing A320neo orders to A321s.

Altogether, Indigo Partners airlines have now ordered 1,145 A320-family aircraft.

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