Azul Orders 35 CFM-Powered A320neos and Leases 28 More

Azul Linhas Aéreas Brasileiras has confirmed a long-expected but somewhat controversial order for 35 Airbus A320neo jets and will also lease 28 more A320neo-family jets.

All 63 Airbus A320neo-family aircraft to be operated by Azul Linhas Aéreas Brasileiras will be powered by CFM International LEAP-1A engines, according to engine joint venture CFM International, which officially confirmed the news on November 28 before Airbus itself did.

On November 28, 2014, engine-maker CFM International officially confirmed that Azul Linhas Aéreas Brasileiras had ordered 35 Airbus A320neo jets and had agreed to lease 28 more, 20 of which would come from lessor AerCap Holdings and eight from GECAS. All 63 aircraft would be powered by CFM International LEAP-1A engines

“We like what we see in the LEAP engine,” says David Neeleman, CEO and founder of Azul Linhas Aéreas Brasileiras. “The technology is cutting edge and, along with the airplane, will allow us to reduce operating costs and increase capacity with the most advanced engine in its category.”

Rumors of the impending A320neo order by Azul Linhas Aéreas Brasileiras began spreading in early October. In mid-month, The Boeing Company released a statement to the effect that “Boeing has not been given the opportunity to present a proposal for single-aisle airplanes” to Azul.

This created some discussion among industry analysts as to whether Azul ‒ which in 2013 became a launch customer for the Embraer E-Jets E2 family, the upgraded and re-engined versions of the Brazilian manufacturer’s popular E-Jets family of regional and small mainline jets ‒  had allowed truly competitive bidding for its expected A320neo-family order.

On November 28, Amsterdam-based aircraft lessor AerCap Holdings announced that it had agreed a deal to lease the airline 20 of the 28 A320neo-family jets it expects to lease, along with five new Airbus A350-900 widebodies.

This computer graphic image from Airbus shows an Airbus A350-900 and an A330-200 in the colors of Azul Linhas Aéreas Brasileiras. In 2014, Azul agreed to lease six A330-200s and five A3500-900s from International Lease Finance Corporation (which was later purchased by AerCap Holdings) in order to operate intercontinental scheduled services to the United States and elsewhere, beginning in December of that year

Following its takeover of International Lease Finance Corporation (ILFC) earlier this year, AerCap Holdings has become the world’s largest aircraft-leasing company. ILFC is the entity which originally ordered the five Airbus A350-900 jets to be leased to Azul and which agreed the lease deal with the Brazilian carrier.

Azul will take delivery of the 20 A320neo-family jets leased from AerCap Holdings in the three years from 2016 to 2019 and will install a single-class cabin in each aircraft, seating up to 174 passengers.

Deliveries of the A320neos that Azul has ordered directly from Airbus will also begin in 2016, according to CFM International. Stamford, Connecticut-based leasing company GE Capital Aviation Services will provide Azul with the remaining eight A320neos the Brazilian carrier has agreed to lease.

The airline plans to use the Airbus A320neo-family jets to connect to more Brazilian cities, offering more seats on its longer-haul domestic flights and reducing operating costs, according to the engine manufacturer.

Azul will take delivery of the five leased A350-900 widebodies in 2017 and 2018. Azul is Brazil’s third-largest airline and operates more than 150 aircraft, though many are ATR turboprops and all of Azul’s jets except a handful of leased Airbus A330-200 widebodies are smaller than the jets operated by rival carriers TAM Airlines and Gol Linhas Aéreas Inteligentes.

Azul Linhas Aéreas Brasileiras said it would operate the 35 Airbus A320neos it ordered from Airbus and 28 additional A320neos it would lease in single-class configuration seating up to 174 passengers. Azul also said it would operate the aircraft on its longer-haul domestic routes and on high-capacity routes such as those linking its Campinas hub with the cities of Recife and Salvador. Azul would also use the A320neo’s good short-runway performance to operate the type on its routes to and from Rio De Janeiro’s downtown, short-runway Santos Dumont Airport

CFM International values at $900 million Azul’s order for at least 70 LEAP-1A engines to power the 35 A320neos it has ordered directly from the manufacturer. This implies that each LEAP-1A engine has a list price of around $12.86 million in current dollars.

The first full LEAP-1A engine began ground testing in September 2013, two days ahead of schedule, launching the most extensive ground and flight test certification program in CFM’s history.

CFM International’s certification-testing program for the LEAP engine encompasses all three LEAP engine variants. The testing program includes 28 ground and CFM flight-test engines and 32 additional flight-test engines for Airbus, Boeing, and COMAC, a Chinese manufacturer which has selected the LEAP-1C to power its planned C919 150-seater.

Over the next three years, these engines will accumulate approximately 40,000 engine cycles leading up to entry into service, according to CFM.

By the time the first LEAP engine (almost certainly a LEAP-1A) enters service with a customer, CFM expects to have simulated more than 15 years of airline service with 60 different engine builds.