Virgin America Inc. agreed to buy 40 Airbus SAS A320 jets, a $3.26 billion purchase at list prices that will more than double its fleet, as the low-fare carrier adds destinations.
The new planes will be delivered from 2013 through 2016, with options for 20 more aircraft, according to the closely held airline, which is part-owned by U.K. billionaire Richard Branson. Virgin America announced the order today at the Farnborough Air Show near London.
Adding jets will support an expansion push that Chief Executive Officer David Cush said includes serving about three new cities a year through 2016. The Burlingame, California-based airline plans to begin flights by year’s end from its hometown hub in San Francisco to Cancun and San Jose del Cabo, Mexico.
“My expectation is that within the next 30 days we’ll announce another route that we’ll start flying before the end of the year, and that’ll definitely be a major business route,” Cush said today in an interview at the show. Places under study include Chicago, Dallas and Austin, Texas, he has said.
Virgin America now has 28 planes, all from Toulouse, France-based Airbus.
The airline would like Airbus to add new engines to its A320 family of aircraft, and would be “first in line” to buy such jets, Cush said. Airbus and Boeing have told airlines they may put new more-efficient engines on current models of jets. So far, neither planemaker has committed.
Virgin America’s planes will have fuel-saving “sharklet” wings that reduce fuel use by about 3.5 percent, the airline said.
Airbus’s list price for the twin-engine, single-aisle A320 is $81.4 million, according to a company fact sheet. Airlines typically receive discounts from planemakers’ published figures.