Originally Posted by
forgot to bid
You know I think we covered this already but just in case we didn't:
May 22 (Reuters) - Delta Air Lines:
U.S. carrier Delta Air Lines will continue to sit out a wave of orders for the latest fuel-saving narrowbody models produced by Airbus and Boeing as it waits for newly developed engines to prove themselves in service, Chief Executive Richard Anderson said on Wednesday.
The two manufacturers have stacked up orders for more than 3,000 of the revamped models, the Boeing 737 MAX and the Airbus A320neo, which boast fuel savings of around 15 percent from the second half of the decade.
"We'd rather get toward the end of a production line because one, the airplane has probably been stretched, and stretched economics are always better than the original economics," Anderson told Reuters reporters and editors at Reuters New York headquarters.
I don't see it as much of a gamble at all. I think the odds of delays and inconvieniences for all this computer created, hyper outsourced supply chain stuff are an absolute certainty. Waiting avoids all that 100%. The promises for fuel efficiency may or may not hit target, but even if they do, 10-15% is nice, no doubt. But we know how much that will equate to in savings, and we also know how much capital we would have to lay out. It just doesn't add up.
Even if we miss some calculations, it won't be by billions. Waiting to buy all these iPlanes will save some massive capital we can hopefully use to pay down more debt with (which will save more capital) as well as other positive return investments like the refinery, etc. Many airlines have been burned with their automatic "I'll take it!" approach to anything new. This appears to be a very reasonable approach with minimal if any potential downside.