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Delta $6 Billion Airbus order 50 new planes

Old 11-20-2014, 08:10 AM
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Default Delta $6 Billion Airbus order 50 new planes

Boeing loses $6B Delta order; gives a big boost to Airbus

An aviation analyst said the backlog of orders for Boeing’s 787 played a role in Delta’s selecting Airbus for a $6 billion deal, giving the foreign rival a big boost.

By Dominic Gates
Seattle Times aerospace reporter

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Ellen M. Banner / The Seattle Times
A Boeing 787-9 widebody jet takes off from Paine Field in Everett last year. Delta has selected rival planes from Airbus instead of Boeing in a deal worth more than $6 billion.



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In a showdown in Atlanta, Airbus’ sales team has beaten Boeing’s to win a big order from Delta Air Lines for 50 widebody jets worth more than $6 billion at market prices.
Boeing was trying to sell Delta a mix of 777-300ERs and the 787-9, the larger version of the Dreamliner, to replace the U.S. carrier’s aging 747s and 767s.
Instead, Delta will take 25 Airbus A350-900s, plus 25 Airbus A330-900neos.
The list price of the deal is $14.3 billion. However, according to estimated market-pricing data from aircraft-valuation firm Avitas, the real value after expected discounts is about $6.2 billion.
News of the Airbus win, first reported Wednesday by aviation analyst Scott Hamilton of Leeham.net, was independently confirmed by The Seattle Times.
Delta wants the A350s starting in 2017 and the A330neos two years later, Hamilton said in an interview. He said a decisive factor in the airline’s choice was that Airbus was able to offer early delivery slots, but Boeing couldn’t.
Boeing has unfilled orders for 850 Dreamliners and plans to ramp up production from the current 10 jets per month to 14 a month by the end of the decade in order to meet demand for earlier deliveries.
Asked about the big expected order in an interview in June, Delta Chief Executive Richard Anderson said “we really need deliveries around 2017, 2018.”
Representatives of Airbus, Boeing and Delta declined to comment Wednesday.
Atlanta-based Delta is the most profitable airline in the world and, measured by passengers carried, the second largest after American Airlines. Its current widebody fleet consists of 126 Boeing jets and just 32 Airbus jets.
Those Airbus planes, all A330s, were inherited from Northwest Airlines when the two carriers merged in 2008. Last year, Delta ordered 10 more A330s.
Delta also inherited from Northwest an order for 18 Boeing 787-8 Dreamliners.
However, faced with the delays and initial problems with that jet, Delta in 2010 pushed out the 787 order by a dozen years, deferring the deliveries beyond 2020.
“I have my doubts that order will ever see the light of day,” said Hamilton. He said it’s deferred so far out that he expects Delta, having for now satisfied its widebody needs, will later negotiate a switch with Boeing to swap out the 787 order for 737 MAX narrowbody jets.
The decision now that Delta will update its widebody fleet with the A350 and the new version of the A330 “is a major disappointment for Boeing,” Hamilton wrote.
Conversely, snagging a major U.S. airline in a head-to-head competition between the 787 and its rival A350 is a boost for Airbus.
“It’s huge,” said Hamilton. “Airbus’ widebody penetration into the U.S. market is minuscule.”
American and United currently have all-Boeing widebody fleets, though American inherited an Airbus A350 order when it merged with U.S. Air and United also has A350s on order.
The Delta order also confirms the market potential of the A330neo, featuring new fuel-efficient Rolls-Royce engines, which was launched in July at the Farnborough Air Show near London with commitments for 121 aircraft. The A330neo will likely be flown on trans-Atlantic routes, including some from Seattle to Europe.
Airbus has 549 firm orders for the A350-900, which is set to be delivered for the first time next month.
This is a long-range plane seating more than 300 passengers, and like the Dreamliner it has a mostly carbon fiber composite airframe. It will likely be used out of Seattle-Tacoma International Airpor on trans-Pacific routes.
Delta is growing rapidly at Sea-Tac. On Wednesday, it announced new flights to Boise, Idaho; Denver; Sacramento, Calif.; and to Ketchikan and Sitka in Alaska. It trails only Alaska Airlines in the number of flights operated out of the airport.
“As Delta increases its Sea-Tac presence, we’ll see more and more Airbuses flying out of here,” said Hamilton.
In the past year, Delta’s leadership has clashed indirectly with Boeing’s in public discussions over whether Congress should reauthorize the U.S. Export-Import Bank. Boeing supports the bank because it finances jet sales to overseas airlines on attractive terms, and Delta opposes it for the same reason.
However, Delta’s vice president of fleet strategy, Nat Pieper, said in June that the Ex-Im row wouldn’t affect the widebody decision.
Pieper described how Delta orchestrates the climax to such big jet sales competitions by bringing the Airbus and Boeing sales teams to a “bake-off” in Atlanta, with the sales guys from each manufacturer negotiating terms from separate rooms long into the night.
Delta initiated this widebody jet competition with a formal request for offers in March.
Pieper said the decision always comes down to “the best economics” for the airline. “We make the rules,” said Pieper.
Dominic Gates: 206-464-2963 or [email protected]
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Old 11-20-2014, 08:34 AM
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Old 11-20-2014, 06:20 PM
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Yeah we bought Airbuses!!!!!!! Airbuss. Airbi? Airbus's?

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Old 11-20-2014, 06:44 PM
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My french is a little rusty, but I think it's Airbios, pronounced Airbooyyy.

Also, you posted a pic of an F-14 and not an A350.
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Old 11-20-2014, 07:09 PM
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Originally Posted by Mesabah View Post
Also, you posted a pic of an F-14 and not an A350.
Don't knock it, it's what Uncle Ferd used to fly in the Marines!!
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Old 11-20-2014, 07:18 PM
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Hey pal, the Marines don't fly F14s, they fly helo's.
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Old 11-20-2014, 07:19 PM
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Originally Posted by forgot to bid View Post
Yeah we bought Airbuses!!!!!!! Airbuss. Airbi? Airbus's?

Isn't Airbus the French word for Boeing?
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Old 11-20-2014, 07:57 PM
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Originally Posted by Boomer View Post
Isn't Airbus the French word for Boeing?
No, it's the Boeing word for DAMMIT!!
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Old 11-20-2014, 08:15 PM
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Originally Posted by Boomer View Post
Isn't Airbus the French word for Boeing?
It's French for a whale's vagina, which explains the A380 styling.
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Old 11-20-2014, 08:32 PM
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That's a shame. 787 seems like a great product and it's pilots confirm that.

Just revisited the A350.. Airbus really has it down how to make ugly aircraft.
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