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Delta Favors Airbus Over Boeing for Order of 100 Jets

Updated on
  • Value of deal, before discounts, could be about $13 billion
  • Delta plans to use Pratt & Whitney engines in the new planes

Delta Air Lines Inc. is leaning toward Airbus SE over Boeing Co. for an order of about 100 single-aisle jets that will be announced after its board makes a decision Wednesday, people familiar with the matter said.

The negotiations include Airbus’s longest narrow-body, the A321neo, said the people, who asked not to be named because the talks are private. A deal, which could be valued at about $13 billion at list prices, would mark a victory for the European planemaker over Boeing’s newest 737, the Max 10.

Delta and Boeing are on opposite sides of a trade dispute after the Chicago-based manufacturer persuaded the U.S. Commerce Department to slap 300 percent duties on a new Canadian plane made by Bombardier Inc. Boeing contends the C Series jetliner was sold to the Atlanta-based carrier at well below cost.

The new Airbus jets will replace Delta’s 1990s-vintage McDonnell Douglas MD-90 jets, as well as aging Boeing 757 and Airbus A320 aircraft. Delta is expected to use them mainly for domestic flights and on shorter international routes. It has the oldest fleet among the biggest three U.S. carriers, with an average age of 17 years among its 847 mainline planes. That compares with slightly more than 10 years at American Airlines Group Inc. and 14 years at United Continental Holdings Inc.

Airbus, Boeing and Delta declined to comment on the order requirement. Shares of the European manufacturer traded down 0.7 percent at 85.67 euros as of 9:18 a.m. in Paris amid mounting speculation that Chief Executive Officer Tom Enders plans to leave when his current term expires.

Pratt Engines

Delta plans to use Pratt & Whitney engines to power the new planes, according to one of the people. Buyers of A320neo family aircraft can choose between the geared turbofan engine, made by United Technologies Corp.’s Pratt, or the Leap, a new powerplant built by the CFM International joint venture of General Electric Co. and Safran SA. A spokesman for Pratt declined to comment.

The new order continues Airbus’s success with Delta, which in the past has favored Boeing planes. The carrier’s biggest order in recent years was for 50 Airbus wide-body jets in late 2014, with a value of $14 billion at list prices. Since then, it has purchased more than 70 of Airbus’s less expensive A321 narrow-body aircraft in three separate transactions.

Delta’s last major Boeing order was for 100 737-900ER jets in 2011, although it has placed add-on orders for more 737s since then.

The carrier’s decision to go with Airbus will reinforce doubts about its willingness to purchase from Boeing going forward. Boeing’s trade case could delay delivery of 75 Bombardier CS100 jets to Delta or even scuttle the deal altogether. Delta Chief Executive Officer Ed Bastian said in mid-October that the spat wouldn’t affect its decision on the narrow-body jet order and that Boeing “has every opportunity” to win.

CNN reported earlier that Delta was set to place the order with Airbus.

— With assistance by Christopher Jasper

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