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Spirit A320neo order allows carrier to replace costly A319 and expand further into South America

Analysis

Spirit Airlines' memorandum of understanding to acquire 45 A320neos and 30 A320s will allow the low-cost carrier to replace its A319s, which the carrier is falling out of favour with due to their higher trip cost than the A320. The A320neo's improved range surpasses that of the A319, allowing Spirit to rationalise its fleet while also potentially using the A320neo's longer range to open new routes. The A320neo will also allow Spirit to serve markets with a full payload that its current A320s cannot serve, or which its A319s can but with a lower seat count.

While Spirit will look to grow its fleet with the order it announced at this week's Dubai air show, 28 of its current 35 aircraft have leases expiring between 2016 and 2018, when the A320neos will start to be delivered.

The new order, valued at USD6.7 billion at list prices, expands the airline's current order, which still has 33 aircraft yet to be delivered, with delivery slated between 2016 and 2021. Airbus is offering the A320 with the GE Leap X engine as well as the Pratt & Whitney 1100G PurePower engine, but Spirit did not say which engine was destined for its aircraft.

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