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Aer Lingus to acquire 4 new shorthaul aircraft

28th February 2008 Print
Aer Lingus Group plc has announced that it has exercised its rights under an agreement entered into with Airbus SAS in 2003 regarding the acquisition of four A320-200 aircraft.

Under the Airbus Purchase Agreement, the aircraft basic price of each A320-200 aircraft (including the airframe basic list price, the sum of the specification change notices and the propulsion systems basic list price), as at 1 January 2003 (being the date by reference to which the basic price is quoted), was US$56.7 million. Thus, the list price for four Airbus A320-200 aircraft would, on the basis of such basic prices, be US$226.8 million in total.

However, the price which the Company will pay for each of these aircraft will be subject to certain downward adjustments as we have obtained certain price concessions from Airbus. The four A320-200 aircraft are scheduled for delivery on dates between late 2010 and early 2011.

Aer Lingus will seek to implement one or more of a variety of financing options in respect of these aircraft closer to the first delivery date in 2010. The Company intends to retain flexibility in determining the method of financing, and may use bank debt, operating leases, finance leases and similar forms of financing common in the industry. Additionally, Aer Lingus has the ability to fund a significant portion of the aircraft order through the Company's own substantial cash reserves.

The purchase of four additional shorthaul aircraft is consistent with Aer Lingus' continued planned growth strategy and will secure delivery of aircraft until 2011, at which stage it is planned that the shorthaul fleet will comprise 39 aircraft. The resulting larger fleet will improve Aer Lingus' ability to increase frequencies and to carry more passengers to more destinations and the Directors believe that this will contribute to earnings accretion.

Commenting on the announcement, Aer Lingus' Chief Executive Dermot Mannion said, “We are pleased to announce agreement on the terms of purchase of these four new shorthaul aircraft which are key to our growth ambitions. The aircraft will complement our existing Airbus fleet and enhance our short haul network.”