America West Airlines said Thursday it ordered 22 Airbus planes to keep up with the company’s planned growth the next three years.
America West Holdings Corp., the parent of the Tempe-based airline, amended a 1999 purchase contract to acquire the aircraft, a mix of A320s and A319s. Ten A320s and seven A319s would be purchased directly from the manufacturer in late 2005 and 2006. Five more aircraft will be leased from various companies in early 2005.
Company CEO Doug Parker said the agreement allows the carrier flexibility as it plans for a growth rate of 10 percent this year and between 8 percent and 10 percent in 2005 and 2006. “The challenging industry environment continues to present opportunities for the low-cost sector, and we believe America West has significant potential to capitalize on these opportunities,” he said in a statement. Bloomberg News said the deal was valued at nearly $1.3 billion.
America West joined other low-cost carriers such as Southwest Airlines and AirTran Airways in adding aircraft, Bloomberg reported. The company is making the purchases at a time when the struggling industry is coping with high fuel prices. “It’s not something you see a lot of,” said Michael Boyd, an Colorado aviation analyst. “But remember, new airplanes cost less to fly. Parts aren’t worn out. Things don’t break.” The deal was hardly noticed on Wall Street where shares of America West rose 16 cents Thursday to $10.25 per share. America West amended an existing contract with Airbus that allows it to convert the delivery of 15 A318s to A319s and A320s.
“It looks like they’re shifting the order from A318s to A319s, which is good because the A319s are bigger airplanes,” Boyd said. “This transcontinental stuff they’re doing, the A319 made it possible. It gives them a lot of flexibility.”
Fourteen of the 22 aircraft would be A320s configured with 12 first class and 138 main cabin seats. The eight remaining aircraft would be A319s configured with 12 first class and 112 main cabin seats. Airbus, based in Toulouse, France, is the world’s largest maker of commercial aircraft.
Boyd said it’s common for carriers to both buy and lease planes.
“Airplane deals are like Liberian freighters, nobody knows who owns them,” he said. While the 17 planes are ordered, they are not financed. A decision on whether to purchase the aircraft won’t be made until a later date, an America West spokeswoman said. There are benefits to purchasing aircraft because the interest expense associated with the payments can offset taxes. America West has flown the A320 since 1991 and the A319 since 1998. America West operates a fleet of 139 aircraft, including 50 A320 and 32 A319 jets.
The carrier will start service on Tuesday from the Valley to Kalispell, Mont., and Anchorage, Alaska. It will also start a third daily, nonstop flight to Washington, D.C.