Delta Plans to Order 200 Narrow-Body Jets, Options for 200 More
Delta Air Lines Inc. plans to order 100 to 200 narrow-body jets and seek options for 200 more, a deal that may become the biggest in commercial aviation history, as it replaces some of its oldest planes.
A request for proposals went to “several” planemakers last month, and deliveries may begin as soon as 2013, Atlanta- based Delta told employees today on an internal website without identifying the companies. Airbus SAS and Boeing Co. are the biggest commercial-jet makers.
Ordering the full 200 planes would be a record, topping the plan unveiled this week by Indian discounter IndiGo Airlines to buy 180 Airbus A320s, with a value of $15 billion at list prices. Delta traditionally bought jets from Boeing until adding Airbus jets in its 2008 acquisition of Northwest Airlines.
“There’s a better chance for Airbus now that Delta no longer exclusively flies Boeing aircraft,” said Jeff Straebler, a debt strategist at RBS Securities Inc. in Stamford, Connecticut. “Delta’s big enough that they could continue with both Airbus and Boeing families, and maybe even the CSeries if they wanted to.”
Bombardier Inc.’s CSeries, which seats 100 to 145 people, seeks to compete with the smallest single-aisle jets from Airbus and Boeing and replace older models such as the DC-9 built by a Boeing predecessor. The Montreal-based company is targeting the end of 2013 for the first deliveries.
Boeing’s 737 and the A320 are twin-engine models seating about 125 to 185 people. Their list prices, on which airlines typically get a discount, range from about $63 million to $95 million, depending on the version. Buying 200 737-800s, the top- selling U.S. jet, would cost $16.2 billion at list prices.
Delta will consider “large, medium and small” narrow-body jets, Chief Executive Officer Richard Anderson said today in a separate weekly recorded message to employees.
“It’s important we take a very long-term view of our fleet,” Anderson said.
A new jet order will replace planes including Boeing DC-9s that average 34 years old, Boeing 757-200s that are 18 years old and A320s that are 16 years old, Nat Pieper, vice president of fleet strategy and transactions, said on Delta’s website posting. The new planes would be used on domestic routes.
Trebor Banstetter, a Delta spokesman, confirmed the posting’s authenticity and said the company declined to comment further on its fleet plans.
“Airbus talks to customers and potential customers worldwide on an ongoing basis,” said Mary Anne Greczyn, a spokeswoman in Washington for the Toulouse, France-based company. “When it comes down to specific conversations about fleet needs and how Airbus can meet those needs, the content of those conversations, and even the existence of those conversations, are confidential.”
A spokesman for Chicago-based Boeing wasn’t immediately available to comment.
Delta also has been acquiring used jets, including five Boeing 757-200s and 33 MD-90s, and will continue to look for additional used planes, Pieper said.
“We’ll evaluate all our options,” he wrote.
Single-aisle jets made up more than 80 percent of Delta’s fleet, which totaled 821 planes as of September. Delta said in October it was keeping its order for 18 of Boeing’s wide-body 787 Dreamliners, a new plane now running three years behind schedule, while deferring deliveries into the next decade.
A Delta order of narrow-body jets also would boost engine makers that are readying a new generation of engines that are about 15 percent more fuel efficient and quieter than the models they would supplant.
The geared turbofan engine from United Technologies Corp.’s Pratt & Whitney and the Leap-X from CFM International, the venture of General Electric Co. and Safran SA of France, are the choices on the announced A320 unveiled by Airbus last month. The CSeries will run on Pratt & Whitney’s geared turbofan.
Current 737s use engines from CFM, while existing A320 models use engines from International Aero Engines, a venture led by Pratt & Whitney and London-based Rolls-Royce Group Plc.
Delta rose 10 cents to $12.61 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 1.9 percent in the past year.
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