Thursday, April 03, 2014

Delta Seeks Offers from Boeing and Airbus for New Jets: Delta Air Lines Is Considering Buying Up to 50 Widebody Jetliners

The Wall Street Journal
By  Jon Ostrower

April 3, 2014 4:44 p.m. ET

Delta Air Lines Inc. said it is considering buying up to 50 widebody jetliners to replace its aging long-haul aircraft.

The airline said on Thursday that it has requested sales offers from Boeing Co. and Airbus Group NV for the jets. The two plane makers have benefited from a wave of replacement demand from U.S. carriers who have moved to renew their fleets with more fuel-efficient models.

The Boeing and Airbus aircraft that Delta is evaluating seat between 250 and 380 passengers and are aimed at replacing its aging fleet of Boeing 767-300ER and jumbo 747-400 jetliners, which make up a significant portion of its long-haul fleet. A Delta spokesman said it expects to decide on a potential order in the second half of 2014.

Delta, the third biggest U.S. airline by traffic, is evaluating the Airbus A350-900, A350-1000, A330-200 and A330-300, as well as the current-generation Boeing 777-300ER and all models of the 787 Dreamliner.

Delta currently has 18 of the 787s on order with Boeing, which Northwest Airlines ordered prior to the carriers' 2008 merger. Northwest had been set as the Dreamliner's U.S. launch customer, but as delays piled up during the jet's development from 2008 to 2011, the airline deferred delivery until 2020.

The airline industry's painful experience with the introduction of new jetliners with advanced technology has dissuaded Delta from considering aircraft currently on the drawing board. The airline is "only interested in proven technology aircraft," said a spokesman, ruling out Boeing's recently-launched 777X, which is due in 2020.

Airbus, too, is evaluating installing a new generation of fuel-efficient engines on the long-range A330, which seat between 250 and 300 passengers, but the Delta spokesman said it is only considering "what is out there currently," not models yet to be launched.

Delta in recent years has done aggressive deals with all the major aircraft manufacturers to secure lower-cost deals on current generation jets. Those aircraft are facing lower demand and nearing the end of their production run as newer more-efficient models with advanced technology are becoming available. Delta also differs from some of its rivals by buying used aircraft, including a large fleet of MD-90s and Boeing 717s.

Delta in 2011 bought 100 current-generation single-aisle 737-900ER jets and last year purchased 10 of the A330s and 30 of the single-aisle A321 jetliners.