EasyJet would rather lease new planes than own them

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LONDON, Feb 5 (Reuters) - European no-frills airline easyJet Plc (EZJ), in
talks with aircraft makers Boeing and Airbus on ordering up to 75 new
aircraft, on Tuesday said it was more interested in leasing new planes than
owning them.

"Our approach now is very much on not owning the aeroplane," easyJet Chief
Executive Ray Webster told Reuters on the sidelines of an aviation industry
conference in London.

Webster said the discount carrier, Europe's second-largest, preferred to
lease aircraft because it retired the planes after seven to 10 years of
service and replaced them with new jets.

"Get them now, use them while they're new, get the benefit of the warranty,
and when they get to about seven to 10 years old retire them," Webster said.


EasyJet announced on Jan. 7 it was in negotiations with rival manufacturers
Boeing Co. (BA) of the United States and Airbus SAS (AIRB) of Europe about
ordering up to 75 aircraft for delivery up to 2007.

European discount airlines have bucked the airline industry crisis, growing
rapidly and winning business passengers as the full-service carriers suffer
from high overheads and the slump in long-haul traffic, particularly on
transatlantic routes.

EasyJet, like other major low-cost airlines such as Europe's largest,
Ryanair Holdings Plc (RYA) RYA.L>, uses only one type of aircraft -- the
149-seat Boeing 737 -- to keep down maintenance and pilot-training costs.

But at the time it announced it was in the talks with Boeing and Airbus, it
said it could also use the Airbus A319, with up to 150 seats, if it was cost
effective for easyJet shareholders.

"What we are trying to do now is quantify what additional cost (of using two
aircraft types) will be incurred," Webster said on Tuesday. He said the
calculations on shareholder benefits and the talks were expected to take
another two months.

The key issue for easyJet is price. With the slump in demand for air travel,
the new-aircraft market has also declined as some carriers defer orders,
presenting the expanding low-cost airlines with an opportunity to press for
cheaper deals.

Airbus is 80 percent owned by the European Aeronautic Defence and Space Co.
NV (EAD) (EAD), with British aerospace and defence industries group BAE
Systems Plc (BA) holding the remaining 20 percent.

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