Delta wants jets – lots of them

It has been reported loudly that Delta is poised to issue an RFP (request for proposal) for as many as 200 jets and this is an order no manufacturer wants to lose.   The rumour comes just days after a record breaking Airbus order from IndiGo of India.

At this point, it’s still rumour but this one strikes me as pretty much dead on.   Delta has a huge fleet (720 aircraft with about 40 orders in place which include the deferred NWA order for the 787) and quite a few of those aircraft need to be replaced now or in the immediate future. 

Delta has the Northwest fleet comprised of the very old DC-9-5o, MD-88, MD-90, 757, 747 and some older Airbus equipment.  The Boeing fleet from Delta’s legacy side isn’t quite as old but there are some 757s and 767s in need of replacement as well.  Considering the widely varying fleet, it would come as no surprise that an replacement order is due.

Oil prices and future fuel prices will also drive the need for this order sooner than later if Delta’s goal of a consistent operating profit is to be realized. 

Pundits think this is Boeing’s to lose and I disagree.  Richard Anderson, CEO of Delta, has much more history with Northwest and he is no Airbus hater.  This will be an extremely heated competition and I will say that if Boeing were to lose this order or a significant portion of it, that will sting Boeing and its product line for years to come.

The prime driver for selection is going to be based on a number of items.  First and foremost, trip costs for aircraft to serve a particular grouping of routes.  We’ll see orders for single aisle aircraft to serve what I would call non-transcontinental routes.  In today’s world, that would be the Airbus A319 and Boeing 737-700.   Having trans-continental capability in the aircraft would be a plus but these aircraft are going to serve the focus cities of the airline with routes stretching out from the cities but not across the country.   The mission that the MD-88s, MD-90s, Airbus A319s and Boeing 737-700/800s are serving today.

The A319s are brand new and so are the Boeing 737-700s/800s.  This is going to be about replacing the McDonnell Douglas fleet.

Then there is a need for the larger trans-continental capable aircraft that remain single aisle serving longer trunk routes that won’t justify a widebody.  Currently, the Airbus A320 and Boeing 757 are serving those routes.  The A320′s arrived in early 1990′s and the 757s date from the early 1980s to the late 1980s.  The options for replacement here are the Airbus A320/321 and the Boeing 737-800 and 737-900ER.    Neither aircraft actually “replaces” a 757 which has great range and great payload.  I don’t think the A320s are going anywhere yet so this will probably involve a 757 replacement and they (Delta) may or may not want it to harmonize with their existing A320s.

Then there are the 767s.  Some are getting old and some are quite new still.  Delta needs an aircraft stretching between what a 757-300 offers and an A330-300 offers.  The 787 fits this and the fact that Delta has deferred its legacy NWA order for these makes me think that these aircraft won’t be candidates for replacement.

The 747s are pretty old and frankly I don’t think these we very well cared for either.  They need to be replaced and I do think we’ll see orders to do this on these aircraft.  None really serve routes that demand 4 engines so I think we’ll see a replacement oriented around 2 engines.

I think it’s anyone’s guess on the single aisle orders.  Airbus will fight like crazy to win this order with their A320NEO options and Boeing may well have to announce a 737 replacement at a great price to win it back.   Boeing should actually have great incentive to get going on the 737 replacement if Delta is truly interested.  With Delta, Southwest and, potentially, Ryanair all wanting a better 737, there is an exceptionally strong business case to get going on this.

If Boeing doesn’t offer a better 737 in this, I think the order goes to Airbus.

As for the 757/767 replacements . . . well, I’d give the edge to Boeing.  I think the 787 *is* a good answer for these aircraft.  They offer the right amount of extra capacity for growth, long haul capability, extremely high efficiency and flexibility.  I do think it possible that an order might be mixed between the A330 and 787 unless Boeing gets off its duff and gets that 787-9 into production.  The 787-9 is the A330 killer.

Since I don’t think the A330s are going anywhere, I don’t see much opp0rtunity for Airbus’ A350 in this mix.  It’s deliveries are too far off and the A330s just don’t need to be replaced for a long time.

I think Delta’s large widebody strategy is likely going to be a mix of 777-200s and the 777-300ER to replace the 747s.  They already have a fleet of 777-200LR with GE engines so I think they’ll order 777-300ERs with GE engines to replace those 747s.  It will do everything the 747 will do only more efficiently.  I do *not* think the 747-8i will enter into this order.  Delta doesn’t need the capacity and the 777-300ER will serve all the routes the 747 is currently serving with no problem.  The A350-1000 is far too far off and its ability to perform is simply way too unknown for this to be serious contender at Delta.

I do not think that Bombardier or Embraer will enter into this order at all.  They just don’t have a product that meets the needs of an airline like Delta very well at all.

Don’t expect an order announcement for about a year.  Delta will let the manufacturers fight it out with best and final offers for quite some time and it will take time itself to do a detailed analysis.   But I can’t wait to hear their decision.


8 Responses to “Delta wants jets – lots of them”

  1. I worked for Delta when we had A310s. That just goes to show you how old I am. I see Delta having an age problem. They have 5 fleets that will need replacements soon, the older A320s, 757, 767-300, 747, and MD-88/90. Right now, the only narrowbodies on order are the -900ERs and as for widebodies only 18 787-8s. In the international space, United and American seem well positioned to replace their aging fleet with 787, 777-300ER (AA), and A350-1000 (UA) orders. All 3 airlines will have to deal with replacements of the 767-300ER. I too think the 777-300ER is the right option for Delta. Delta and Airbus have never had the best of relationships and they need long range widebody replacements quicker than they can get the -1000

  2. With 100 737-900s, 88 717s, and 30 A321s on the way, the narrow body renewal at Delta is becoming more clear. The remaining DC-9s will finally be retired in early 2014. MD-88s and MD90s will receive new flight deck upgrades so look for them to soldier on another 10 years or so.

    Wide bodies are less clear at this point. Ten A330s were recently ordered, but these will need to be more orders to replace older 767s later in this decade.

    The 747s are a mixed bag; some are old including the prototype from 1988, while there is a newer batch from the late 90s and early 2000s that could fly another 10 to 15 years.

    The 773 or 77X are obvious choices, but their prices are high due to their popularity. I personally would like to see Boeing make Delta a great deal on a batch of the 748i. It has been a slow seller and needs orders to keep the line going. Delta has not been shy about buying aircraft that are out of favor with other airlines.

  3. Not sure I would call flight deck upgrades on inefficient aircraft a renewal. It’s not going to make a JT8D gas guzzler more efficient. They deferred their 787s to 2020 so obviously they will be operating the 767s for at least another 10 years. Probably a bad move. By then they’ll have only a relatively small international fleet (A330s and 777s) that aren’t old airplanes. They key is to keep the new planes coming at a steady pace while retiring the old ones. I’m pretty sure they will announce a purchase of 777X, A350, or additional 787 soon, but the question is will it be too late to avoid the blow up in maintenance costs of the older airplanes?

  4. It seems that there is always that critical point in aircraft ownership where very suddenly maintaining them becomes untenable.

    It’s hard to see 767s avoiding that until 2020.

    But Delta is doing things differently and one cannot argue with their financial results right now so I’m going to hold final judgement.

    But the aircraft that make me the most itchy are those 767s not getting replaced. I can kind of “own” the logic on every other choice that one.

  5. It’s all about delivery slots. That’s why you see airlines like Emirates making big purchases for aircraft they won’t get for 10 years. Delta’s gotta get their order on the books to preserve delivery position.

  6. Too bad retiring 747. Upstairs business class new seats are great. 737 first class row 2,3,and 4 not enough leg room.
    prefer 737 than airbus 320 0r 319. Love 757, a perfect plane with great engine and very spacious seats. Boeing 777 with better galley and seats arrangement. Has slight edge over airbus 330. do not care for embrea 900 or lower. no carryon space and terrible for winter travel.

  7. With the recent additions of 49 used MD90s, plus orders for 88 former Air Tran 717s (about 44 delivered now), 100 737-900s (about 27 delivered now), plus orders of 45 A321s and 10 A330s over the next few years, Delta has made a good start on fleet renewal. The DC-9s are gone, and the older 757s are on the way out.

    Delta also recently announced that 4 747-400s would retire this year, presumably to be replaced by 242 ton A330s to be delivered next year.

    Delta also reportedly issued an Request For Proposals for 50 new wide body planes, but there hasn’t been news on this since this spring. The types under consideration were reportedly the A330 (current engine and neo), 777 (current engine), and 787. These would replace the rest of the 747s, plus the older 767s.

    My best guess is the wide bodies will be a split between Boeing and Airbus, similar to the 737-900 and A321 orders. I think the A330neo is most likely.

    I would look for Delta to pick up more 717s as they become available. Delta has also spoken positively about the Bombardier C Series, but I don’t expect them to order until flight testing is done and another airline is flying the type.

  8. I feel Delta will order both Boeing 737-800ER MAX,-900ER MAX and Airbus 321-200 NEOs.

    I feel they will take Boeing 77-300ERs due to availability, and possibly a few 777-200ER/LRs.

    I feel Mr. Anderson will pass on the 787s due to the great luck with 777s.

    A real longshot is a 787-8 order due to availability.

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