Republic Airways Holdings Inc., parent company of Frontier Airlines, announced today that it has signed a letter of intent with Airbus to purchase 40 A319neo (new engine option) and 40 A320neo aircraft.
At list prices, the planes are valued at $7 billion. It is not immediately known how the purchase will be financed. A Republic statement said the cash impact will be minimal.
The aircraft, which will be powered by CFM’s LEAP-X engines that are 15 percent more fuel-efficient than those currently in use, will be flown by Frontier.
“This order is a reflection of the strong and mutually beneficial partnership Frontier and Airbus have enjoyed over the past decade,” Republic CEO Bryan Bedford said in a statement.
Bedford said the Airbus neo aircraft “will be a major factor in Frontier maintaining its position as an industry cost leader and will allow Frontier to continue to offer travelers low fares despite persistently high fuel prices.”
Frontier currently operates 58 Airbus A318, A319 and A320 aircraft.
The aircraft order “displays our confidence in the bright future ahead for Frontier Airlines,” Bedford said. The fuel savings from the aircraft “would correspond to a 5 percent margin improvement at today’s prices.”
Republic officials said the order is for deliveries beginning in 2016, with the initial deliveries to replace current aircraft coming off lease in 2016.
Ann Schrader: 303-954-1967 or aschrader@denverpost.com.
