Hawaiian Sets Airbus Order

It will likely buy 24 planes.
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Hawaiian Airlines

(HA) - Get Report

has signed agreements to order 12 Airbus planes with purchase orders for 12 more, saying it doesn't want to be left behind when the major U.S. airlines begin to order new widebody jets.

The airplanes include six A330-200s, with deliveries to begin in 2012, although Hawaiian may arrange to lease additional A330s as early as 2009. Also, the first of six A350 XWB-800s would arrive in 2017. Hawaiian has purchase orders for six additional models of each fleet type, or up to 24 airplanes in all.

"We all understand that the U.S. majors haven't stepped up to replace their widebody fleet," Hawaiian CEO Mark Dunkerley said on a conference call Thursday. "When they do, little guys like us will be at the back of the line." Once the majors start to order, delivery positions for widebodies could stretch out as far as 2020, he said.

Hawaiian has signed a memorandum of understanding with Airbus and engine maker Rolls Royce for its order, enabling the carrier to replace its fleet of 18 Boeing 767-300s, which faces impending lease expirations and retirements.

Dunkerley said the new planes are about 5% more fuel efficient and have longer range than the 767s. That could enable Hawaiian to serve, without seasonal weight restrictions, destinations in the eastern U.S. as well as Hong Kong, Singapore and Shanghai, and to upgrade on routes to the U.S. West Coast, which Dunkerley called "our bread and butter."

The airline also has a narrowbody fleet of 11 Boeing 717s.

Hawaiian intends to operate the A330s with 305 seats and the A350s with 322. Its 767s seat 265. The carrier said the purchase represents the largest single investment in its 78-year history. Although specific terms were not disclosed, the list price for all the planes is $4.4 billion.

Dunkerley also said his company's execution depends partially on reaching agreements with pilots and flight attendants. "Our general view is that we would want to hold our labor costs basically flat," he said.