Sizeable Spirit Airlines order could be boost for Airbus in Alabama

Sizeable Spirit Airlines order could be boost for Airbus in Alabama
Employees walk past an Airbus SE A321 plane with a livery for Spirit Airlines Inc. at the Airbus Final Assembly Line facility in Mobile. (Luke Sharrett/Bloomberg)

Spirit Airlines Inc. has agreed to buy 100 Airbus SE A320neo family aircraft, handing the European planemaker a potential order in the $11 billion range during a weak year for sales.

The memorandum of understanding announced Wednesday would include a mix of all three of Airbus’s workhorse single-aisle models, from the A319neo to the A321neo, Spirit said in a statement Wednesday. If the pact becomes a firm order, the planes would be delivered through 2027. Spirit also took options for another 50 planes.

The deal comes as Airbus’s commercial aircraft face tariffs from the Trump administration resulting from a 15-year legal battle at the World Trade Organization over government subsidies received by the European manufacturer. Airbus also builds A320s in Mobile, and Spirit noted Wednesday that seven A320neo planes it’s taking by year’s end will be from the U.S. factory.

Spirit, an ultra-low-cost carrier with aggressive growth plans, stood by Airbus after spending more than a year evaluating rival offers, including Boeing Co.’s 737 Max.

Spirit Airlines exclusively flies the Airbus A320 family of aircraft and is expecting to receive seven A320neos from the Airbus factory in Mobile this year. (Airbus)

The Airbus models have 2018 list prices ranging from $101.5 million for the smaller A319neo to $129.5 million for the A321neo, although large orders typically come with sizable discounts. The neo designation is for “new engine option,” designed to make the jets about 20% more fuel efficient than their predecessor versions.

“The additional aircraft will be used to support Spirit’s growth as we add new destinations and expand our network across the U.S., Latin America and the Caribbean,” Spirit Chief Executive Officer Ted Christie said.

Earnings beat

The fleet news coincided with Spirit’s report that adjusted third-quarter earnings and sales topped analyst forecasts. Net income of $90.5 million, or $1.32 a share, was 12 cents ahead of the average of estimates, according to a company statement. Revenue was $992 million.

Deliveries from the U.S. airline’s current Airbus order will be completed in 2021. Spirit, based in Miramar, Florida, operates only A320 family models, and plans to fly 145 jets by year’s end and 193 by the end of 2021. The carrier expects to boost its fleet to almost 300 aircraft in the coming years.

As part of its review, Spirit also considered adding the smaller A220, a model Airbus acquired and renamed from Bombardier Inc., Christie said in an August interview. Airbus was motivated to keep Spirit’s business as Boeing seeks to broaden deployment of the 737 Max into the ultra-lower-cost segment, he said.

Contact the reporter at [email protected].)

Related Stories