(Bloomberg) -- Breeze Aviation Group Inc. has ordered 20 additional Airbus SE A220-300 aircraft, bolstering the fleet of its startup airline and enabling longer domestic and short-haul international routes.
The new planes, adding to a prior 60-jet order, mean the low-cost Breeze Airways will receive one A220 a month for the next six and a half years, the company said in a statement Monday. The aircraft have a book value of $91.5 million each, for a total value of about $1.8 billion, though airlines traditionally receive discounts from the list price for multiplane orders.
The carrier, which offers nonstop flights primarily to leisure destinations from relatively small airports, converted existing aircraft options to firm orders to secure slots in Airbus’s production slate and ensure its growth plan isn’t disrupted, Breeze Chief Executive Officer David Neeleman said in an interview. It has 40 remaining options for additional A220-300s.
“It’s a pretty sought-after plane,” he said. “We thought if we waited too much longer, potentially we wouldn’t be able to continue the trajectory we’ve been on for one a month.”
Breeze will receive its first A220 on Oct. 26 and will have four by the time flights begin with the Airbus planes in the second quarter of 2022. The carrier will announce routes for its initial A220s early next year, including its first transcontinental flights.
The airline, which started flights in May, currently offers routes among 16 U.S. cities from the Midwest to the East Coast using 13 Embraer SA regional jets.
The Airbus plane is “purpose-built” for the 120- to 160-seat market, allowing Breeze “to connect distant points that were previously unprofitable or, in some cases, impossible,” C. Jeffrey Knittel, chairman and CEO of Airbus Americas, said in the statement.
Breeze recently secured $200 million in a second round of capital to fund expansion, with investors including Blackrock Inc., Knighthead Capital Management, Peterson Partners Inc. and Sandlot Partners.
Like other U.S. airlines, Breeze has seen a slowing in traffic amid growing coronavirus cases linked to the delta variant, Neeleman said. Holiday bookings for November and December “look good so far.” The carrier will have four aircraft dedicated to charter flights this winter, a number Neeleman eventually hopes will expand to 15 or 20 serving the “very lucrative” business hauling college sports teams and others.
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