Delta Said to Defer Order for 100 Small Jets By Mary Jane Credeur and Jose Sergio Osse - Aug 25, 2011


Delta Air Lines Inc. (DAL) deferred an order of 100 small narrow-body jets until 2012, delaying talks with planemakers such as Embraer SA (EMBR3), as it prepares to buy 100 Boeing Co. (BA) 737s, a person familiar with the matter said.

Discussions with Embraer and competitor Bombardier Inc. advanced this year while Atlanta-based Delta negotiated with Boeing and Airbus SAS for the larger planes, said the person, who wasn’t authorized to speak publicly. The Boeing deal was described this week by people familiar with that purchase.

Embraer and Bombardier are trying to create a niche for jets smaller than those from Airbus and Boeing. Single-aisle planes from Sao Jose Dos Campos, Brazil-based Embraer or Bombardier would complement Delta’s mainline fleet of Boeing and Airbus narrow-bodies.

“After talks with Delta, Embraer expects that Delta’s decision whether to buy its planes or equivalents from competitors will only be made next year,” Embraer Executive Vice President Paulo Cesar de Souza e Silva said yesterday in an e-mailed statement.

Embraer hasn’t decided whether to build a new plane or a version of its largest regional jet with new engines to compete with Montreal-based Bombardier’s CSeries. Bombardier targets a 2013 debut for that plane, which has a list price of $58.3 million for the CS100 model and $66.6 million for the CS300.

Trebor Banstetter, a spokesman for Delta, and Bombardier’s John Arnone declined to comment.
No Timeline

People familiar with the matter had said on Aug. 22 that Delta had delayed a decision beyond this week on buying smaller narrow-body aircraft, without giving the size of the planned purchase or a new timetable.

Delta’s plan to order Boeing 737-900ERs would have a list value of about $8.58 billion, based on list prices. Airlines typically buy planes at a discount.

The 737-900ER is the largest variant of Chicago-based Boeing’s 737 family, the world’s most widely flown jetliner, and seats about 200 passengers. Bombardier has targeted the CSeries as a rival to planes with 100 to 149 seats.

Early customers for the CSeries include Korean Air Lines, which ordered 10 CS300 jets in June at the Paris Air Show. The CSeries has a 20 percent fuel advantage over similar planes, according to Bombardier.
Delta had said in January that it planned to buy 100 to 200 narrow-body jets and seek options for 200 more, with deliveries starting as soon as 2013. The company said it would consider small, medium and large single-aisle aircraft.

To contact the reporters on this story: Mary Jane Credeur in Atlanta at [email protected]; Jose Sergio Osse in Sao Paulo at [email protected]
To contact the editors responsible for this story: Ed Dufner at [email protected]; Francisco Marcelino at [email protected]