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Air Transat says it will lease 10 of the newest Airbus single-aisle aircraft to replace its aging wide-bodied Airbus A310 models.Paul Chiasson/The Canadian Press

Air Transat says it will lease 10 of the newest Airbus single-aisle aircraft to replace its aging wide-bodied Airbus A310 models.

The airline will lease the new-engine option version of the Airbus A321LR, making it the first North American customer for the largest model of single-aisle planes in the Airbus A320 family.

The older A310s will be phased out, while the new planes "perfectly complete" the carrier's existing fleet of wide-bodied A330s and Boeing 737s, Jean-Marc Eustache, chief executive officer of parent company Transat A.T. Inc., said in a statement.

The planes will be delivered in 2019 and 2020 and will offer 200 seats in a two-class configuration. The A310s can carry up to 250 passengers in two classes.

The new planes are the longest-range single-aisle planes available and can travel up to 7,400 kilometres, Transat said.

"Its size gives major flexibility in terms of flight commercialization and frequency while its fuel efficiency will keep cost per seat as low as possible, while reducing its carbon footprint," Transat said in a statement.

Airbus said the costs to operate the A321LR are 30 per cent lower than its nearest competitor and allows airlines to fly to destinations that were previously available only to wide-bodied aircraft.

Fuel costs represent about one-third of overall expenses for airlines. The new-engine option, or neo version, of the Airbus A320 family of planes is the European giant's response to Bombardier Inc.'s C Series, which offer a 20 per cent lower fuel cost than the A318 and A319 versions of the Airbus single-aisle family.

The two versions of the C Series, however, offer considerably fewer seats than the A321. The CS300 version of the C Series tops out at about 160 seats.

While airlines load up on more fuel-efficient planes, they are also enjoying the benefit of stabilizing fuel prices, AltaCorp Capital Inc. said Tuesday in a research note.

"Airlines capture a greater margin in a falling price environment, but can see significant earnings pressure when fuel prices rise due to the timing differences between the pricing and booking of fares and travel occurring with the airlines assuming the commodity pricing risk," the note said.

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