JetBlue Reportedly Got a 72% Discount on its Huge A220 Order
As all bargain shoppers know, being the first in line is often a good bet. As the first buyer of the new (in name only) Airbus A220-300 jet, JetBlue received a significant discount on its July 10 order of 60 planes, according to international credit rating agency Moody's. Both JetBlue and Airbus are keeping pricing details confidential, but analysts estimate that the deal most likely is worth $1.4-1.7 billion, which would mean an average sticker price of $23-28 million per jet. Although it's typical for airlines to negotiate price breaks for volume orders, JetBlue's quick order may have saved the carrier up to 72% off of the deal's list value of $5.4 billion, according to a report by Moody's analyst Jonathan Root.
Delivery of the aircraft will begin in 2020 with four planes, ramping up each year until JetBlue receives 22 in 2024. The airline has the option of ordering an additional 60 aircraft beginning in 2025.
Technically speaking, the Airbus A220-300 isn't a new aircraft design. The Jet Formerly Known As the Bombardier CS300, which TPG once called "the most comfortable economy class you'll find," was rebranded after Airbus acquired a 50.01% stake in the Bombardier CSeries program last fall. Montreal-based Bombardier still owns 31% of the company while Investissement Québec, an investment arm of the Quebecois government, owns 19%.
With this purchase, JetBlue will become the first US carrier to fly the larger -300 variant which carries between 130-140 passengers. Delta placed an order for 75 A220-100s (formerly known as the Bombardier CS100) in April 2016. JetBlue has stated that the airline might swap part of its A220-300 order in favor of the smaller A220-100, which seats up to 120 passengers. The A220s will replace 60 of JetBlue's Embraer E190 jets, which would have required costly upgrades over the next decade.
Bombardier's shares shot to a nearly seven-year high as a result of Tuesday's news, reaching $5.58 per share in early trading on the Toronto Stock Exchange Wednesday before closing at $5.43 in the afternoon session. The Canadian plane maker has experienced a tumultuous year in its dealings with the US market. Prior to the Airbus purchase in October 2017, Boeing filed a trade complaint against Bombardier earlier in 2017 for selling its planes to Delta for "absurdly low" prices. In response, the US government imposed a stiff 220% tariff of purchase price on Bombardier CSeries jets in September 2017, as well as an additional 80% levy a few days later. Although the US Commerce Department upheld the punitive 300% tariff in December 2017, the US International Trade Commission unexpectedly handed Bombardier a win over Boeing in January with a unanimous vote to eliminate the imposed tariffs.
Airbus hopes to reach "triple-digit" sales numbers by the end of 2018, sales chief David Dufrenois said Tuesday in Toulouse. Long-term, the plane maker hopes to attain at least 50% of the commercial market for 100-150 seat aircraft over the next 20 years by selling more than 3,000 planes.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.