America West Plans to Buy Up to 118 Airbus Aircraft
America West Airlines, intent on a major expansion of its routes, said Monday it plans to acquire up to 118 European-made Airbus Industrie A320 airliners during the next 15 years in a transaction that could ultimately total $5 billion.
Michael J. Conway, the Phoenix-based carrier’s president, also said in an interview that the airline is still negotiating to buy the Pan American World Airways shuttle, which flies between New York, Washington and Boston, and might use some of the new planes on those routes.
In a complicated deal, 7-year-old America West has committed itself to buy or lease 74 aircraft on firm order. The airline said that if all of the additional 44 options are exercised, it will be the largest commitment by any airline for the A320 so far.
The first 16 planes will be leased and put into service next January. They had originally been ordered by financially troubled Pan Am, which subsequently sold its assembly line positions to Braniff. Then Braniff filed for bankruptcy after flying a few of the A320s for several months.
Most of the 16 planes are parked at America West’s hangars in Phoenix and are being painted with new logos and reconfigured to have 148 seats and two classes of service.
The other parties to the transaction with America West and Airbus--which is a consortium of government-subsidized companies in Germany, France, Britain and Spain--are Guinness Peat Aviation, an Irish airplane leasing company; Kawasaki Enterprises, a Japanese leasing company, and Hartford, Conn.-based International Aero Engines, which will provide the V2500 engines for the aircraft.
The A320 is a two-engine, medium-range airliner that can carry up to 150 passengers.
As part of the agreement, America West received $220 million in cash advances, crew training and spare parts from the engine maker and the leasing companies. Conway said it has not been determined how many planes will be leased and how many will be purchased, with the decision depending on financial conditions when each is delivered.
Some of the money, he added might be used for a purchase of the Pan Am Shuttle. He said, “Serious negotiations are taking place with Pan Am on an ongoing basis, but we have not reached any agreement.”
Some observers have speculated that if America West buys the shuttle it might shut down the operation, merely wanting to obtain its airport gates in Washington, New York and Boston. Gates are rationed in the airports in New York and Washington.
America West’s new planes will allow it to benefit from what Conway said is “the last shakeout of deregulation.” He said a void would be created by cuts at other carriers, enabling one with a modern, fuel-efficient fleet to thrive. He said America West intends to expand its route structure and add flights to successful existing routes.
