Allegiant adding Airbus planes to fleet

Allegiant Travel, Las Vegas-based corporate parent of Allegiant Air, on Friday said it will be expanding its fleet of Airbus aircraft through acquisitions and conversion of leases to purchase.

The low fare airline, which serves Cedar Rapids with six nonstop destinations, has agreed to purchase 12 Airbus A319 aircraft currently leased to a European carrier until 2018. The company also agreed to purchase two currently leased A319 aircraft in its fleet.

'We continue to find purchase transactions for Airbus aircraft to secure our future growth,” said Andrew Levy, Allegiant Travel president and chief operating officer. 'We will have 32 Airbus series aircraft - all owned - in our fleet by the end of 2018. We expect to use debt financing along with cash reserves to purchase these aircraft.”

Levy said the additional Airbus A320/A319 aircraft are all sister aircraft to planes currently operated by Allegiant.

'We remain active in the used Airbus market and hope to add more aircraft to our fleet during 2016 and 2017,” he said.

As each of the 12 aircraft leases with the European carrier expires, Allegiant will transition the plane into its operating fleet. The company expects to recognize approximately $30 million in annual lease revenue beginning this month through 2018 and plans to assume $142 million of secured debt under the transaction.

The remaining two Airbus aircraft - an A319 and an A320 - will be purchased in 2015 and 2016 when they are delivered. Allegiant also has agreed to buy two currently leased A319 aircraft in its fleet, a transaction that will be completed in July.

Allegiant expects its capital expenditures to be about $315 million in 2014 and approximately $220 million in 2015.

Airbus on Friday announced plans to increase the certified maximum number of seats from 180 seats to 189 seats, starting with the existing version in early 2015.