Budget airline easyJet agrees in principle to buy 120 Airbus planes

Monday, October 14th 2002, 12:00 am

By: News On 6

LONDON (AP) _ EasyJet has agreed in principle to buy 120 planes from European aircraft maker Airbus SAS with an option to purchase another 120 over the next decade, the budget airline announced Monday.

The airline, based at Luton airport north of London, said it planned to buy the 150-seat Airbus A319s to complement its fleet of Boeing 737s with terms to be negotiated over the next few weeks.

If a deal is completed, the first planes would be delivered next year.

The Airbus order is worth about $6 billion, the Seattle Post-Intelligencer reported, although large orders are often discounted by 20 percent and sometimes more.

Airbus is trying to make inroads into Boeing's domination of the low-cost airline sector.

``Low-cost companies remain low-cost by not wasting money,'' said easyJet chairman Stelios Haji-Ioannou. ``Sticking to old-fashioned fads like `low cost airlines only fly Boeing' does not reduce costs.''

In January, easyJet's Irish-based rival Ryanair said it would buy 100 Boeing 737-800 aircraft in the next eight years and took options on 50 more planes.

EasyJet, which bought discount rival GO in May, has a fleet of 64 Boeing planes and is seeking to become Europe's predominant low-cost carrier. EasyJet also has 15 Boeing 737-700s on order, according to Boeing's Web site.

The 737 and A319 each carry a list price of about $51 million.

Unlike many bigger, long-distance airlines, easyJet has reported strong passenger traffic in spite of the downturn in the industry since the terrorist attacks of Sept. 11, 2001.

Among low-cost carriers in the United States, Southwest Airlines operates an all-Boeing 737 fleet and JetBlue, a much smaller operation, flies Airbus planes.

The P-I reported that loss of the easyJet order is unlikely to affect employment at Boeing's 737 Renton factory, at least for now.

Boeing has nearly completed a workforce reduction of about 30,000 jobs because of the airline industry slump.

Boeing executives have said more jobs could be lost if production has to be cut further, but most of the slowdown in orders has been in larger planes. Boeing has a backlog of orders for more than 800 737s.