Delta Done With Aircraft Orders | AVIATION WEEK
Delta Done With Aircraft Orders
Sep 14, 2011
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By Andrew Compart
[email protected]
Delta Air Lines is done with aircraft orders for “the next couple of years,” President Ed Bastian said today, quashing speculation that an order for smaller, single-aisle aircraft remains in the offing.
“We are done talking about aircraft for the near to medium term,” Bastian said in a presentation at the Deutsche Bank Aviation & Transportation Conference. “We are very comfortable where we sit on our fleet.”
“I do want to put to rest any thought we’re in the market on a new aircraft decision,” he added.
Delta’s decision that its recent order for 100 Boeing 737-900ER aircraft is sufficient for its narrowbody fleet renewal could have a significant impact on Bombardier, which loses a potential near-term customer for the CSeries. It also could affect Embraer’s decision on whether to develop an aircraft larger than its E-190 and E-195 jets, although Embraer Executive VP Paulo Cesar de Souza e Silva already said in late August that he did not expect a decision from Delta on a smaller narrowbody for at least a year.
Bastian’s comments break Delta’s near silence on the issue when it announced its 737-900ER order last month, which led to the speculation given that an order for smaller narrowbodies also had been expected. Bastian referred to the talk as “a lot of industry chatter about a second tranche of aircraft renewal.”
Delta remains focused on reducing its adjusted net debt, which stood at $13.8 billion at the end of June, to $10 billion by 2013. In connection with that goal, it wants to keep annual capital expenditures at $1.2 billion to $1.4 billion, including all aircraft acquisitions. In his Sept. 13 remarks on the fleet, Bastian emphasized the airline’s desire to stay within those limits.
In late August, Delta announced an order for 100 Boeing 737-900ER aircraft to replace aging domestic narrowbodies starting in the second half of 2013 and running through 2018—an order with an $8.5 billion list price that will make Delta the second-largest operator 737-900ER operator in the world. But that is only half the number of single-aisle replacements Delta said it was considering when it issued a request for proposals in late 2010: at that point, the airline talked about the “potential replacement” of 100 to 200 large, medium and small narrowbodies, with options for as many as 200 more, to replace its aging Airbus A320s, DC-9-50s and 757-200s.
Bastian also revealed Sept. 13 that Delta is planning for a 2-3% year-over-year reduction in its 2012 capacity. He did not specify where those cuts might be made.
Delta is reducing its fourth-quarter 2011 capacity by 4-5%, making the largest cuts on its transatlantic services (down 10-12%). It is reducing its fourth-quarter capacity by 1-3% for both domestic and Pacific services, but increasing it by 3-5% for Latin America services.
Photo: Delta