EasyJet's plans to integrate its Air Berlin assets and new Berlin-Tegel Airport base into its operation include transitioning up to 25 Airbus A320s from wet leases to dry leases throughout most of 2018, with the pace driven by how quickly it can reconfigure aircraft and train flight crews, airline CFO Andrew Findlay says.
"We will launch the flying program using wet leases," Findlay told analysts on a recent earnings call. "We'll simultaneously recruit and train crew and prepare dry leased aircraft for a phased introduction throughout the year. By winter 2018, we'll be fully operable in a dry-lease operation with our own crew."
The airline on Oct. 27 announced a deal to acquire part of insolvent Air Berlin's assets at Tegel. The deal included leases for up to 25 A320s and provisions for adding about 1,000 of the German carrier's pilots and cabin crew as well as acquiring slots. It is expected to close by yearend.
The carrier's tentative plans for its Tegel base call for flights to start in early January. There will be steady ramp-up of EasyJet-operated aircraft through July, then a pause during the peak months of August-October, when the airline will operate "full summer schedule." By November, the Tegel base is expected to have all easyJet-operated aircraft.
"The pace of the swap from the wet leases to dry leases is driven by the rate of conversion and training of crew onto easyJet's operating procedures," Findlay says. "Clearly, as you would expect, safety of our operation is our number one priority, and we are ensuring this process is robust and thorough."
As part of the transition, the leased aircraft will be converted to easyJet's brand, including new livery. The airline expects to spend about £100 million ($135 million) in one-time costs to train the new crew and update the aircraft.
The carrier has not said how many aircraft it intends to base at Tegel, Berlin's main airport, but the figure will be affected by its existing operation at Berlin's Schönfeld airport.
"We've got nine aircraft at Schönefeld. We're looking to lease up to 25 for the overall [Berlin] operation," Findlay says. "We haven't made a call in exactly how we'll allocate those assets across those two [airports] right now."
EasyJet's decision to lease the ex-Air Berlin aircraft aligns with its strategy to maintain capacity flexibility. As of Sept. 30, the end of its 2017 fiscal year, 26% of its 279-aircraft fleet were on dry, or operating, leases. In five years, it plans to have 348 aircraft, but has the flexibility to fly as many as 363 or as few as 271 factoring in lease and new-aircraft order and deferral options.
Findlay said the carrier recently exercised some of its new-order flexibility by moving some A321neo deliveries into fiscal year 2018. The carrier now plans to take its first six A321neos by October 2018.
The A321neos are part of a 30-aircraft commitment that started out as A320neo orders. EasyJet is upgauging its fleet to help boost profitability by adding seats to existing operations. It started 2017 with a fleet made up of 44% A320s, and the rest A319s. At September 30, the percentage of A320s was up to 49%, and its average seats per aircraft was 168, up from 166 a year earlier.