Virgin plans to purchase 40 Airbus A320s
July 22, 2010, San Francisco, Calif. - Virgin America announced today it plans to order 40 new Airbus A320 aircraft, with options for 20 additional aircraft. The new aircraft would be delivered from 2013 through 2016 - with 10 firm orders per year on average, and options for 20 additional aircraft in 2017-2018.
With today's order of 40 new aircraft and growth from other sources, Virgin America's fleet is projected to grow from its current 28 aircraft to 90 aircraft by 2016 – a compounded annual growth rate of 21.5 percent. David Cush, Virgin America Presidentand CEO, and John Leahy, Airbus Chief Operating Officer, make the announcement of their memorandum of understanding today at the Farnborough International Airshow.
"This MOU reflects confidence in our financial performance, business model and unique service. Despite the tough economic climate since our 2007 launch, Virgin America has experienced record growth, strong financial progress and a sweep of the major reader-based travel awards. At a time when most carriers are contracting and shedding jobs, we're pleased to be growing and bringing our low-fare, innovative service into new markets," said Virgin America President and CEO David Cush. "The low operating costs, cabin comfort and carbon-efficient design of our all new Airbus fleet will continue to fuel our growth and success in the North American market."
With the U.S. Department of Transportation's approval of its new ownership structure in January 2010, Virgin America is focused on growth – with six additional aircraft entering its fleet this year and 12 additional aircraft planned in 2011. The airline currently has four aircraft for delivery in 2012 and expects to look for additional aircraft for 2012, in order to bridge its fleet growth to the new Airbus order starting in 2013. The airline currently serves 10 cities, with expansion to Orlando, at least one more U.S. city and two destinations in Mexico by this winter. The airline expects to grow by three to four additional new destinations a year from 2011-2016. The airline has created 1600 new jobs since its 2007 launch and intends to double its teammate base in the next three years. Virgin America continues to expand at its base of operations atSan Francisco International Airport, as one of two anchor tenants in the airport's new $383 million Silver LEED certified Terminal 2 facility – which is slated to open in 2011.
"A repeat order from Virgin America – a U.S. airline growing quickly both in terms of its route network and its reputation for excellent service – is a great affirmation of the benefits of operating the A320 Family," said John Leahy, Airbus Chief Operating Officer, Customers. "We are very pleased they have chosen to expand their reach with even more of our aircraft. Their investment in a state-of-the-art, fuel-efficient Airbus fleet will continue to give them a competitive advantage as they grow."
Virgin America is planning to benefit from the new, fuel-saving "Sharklet" option that is available beginning in late 2012 on A320 aircraft. Sharklets have been developed to enhance the eco-efficiency and payload-range performance of the A320 aircraft, resulting in at least 3.5 percent reduced fuel burn over longer sectors. Since its launch, Virgin America has operated a new Airbus A320 Family fleet that is up to 25% more fuel efficient than the average U.S. fleet. The airline has not yet announced its choice of engines for the additional aircraft.
According to Airbus, each new order for Airbus aircraft means a direct boost to the U.S. economy. Airbus spends some 40 per cent of its procurement budget with hundreds of suppliers in more than 40 U.S. states. In 2009 alone, Airbus spent more than $10 billion in the U.S. – more than it spent in procurement in any other country. Using U.S. Department of Commerce figures, that dollar amount translates into Airbus support of 180,000 American jobs.
"Airline expansion drives job, travel and tourism growth – and is also a powerful indicator of overall economic health. When we enter new markets service improves and fares drop, so our growth into new cities stimulates demand as well as direct and indirect job growth," added Cush.