Delta orders 25 Airbus A350s and 25 A330-900neos – USA Today

A diverted 767 at CLE in 2013. To be retired within the next few years. - Photo: Ed Jones – OPShots Contributor//

A diverted 767 at CLE in 2013. To be retired within the next few years. – Photo: Ed Jones – OPShots Contributor//

Delta will go with Airbus in a deal for 50 wide-body jets that would be worth more than $14.3 billion at list prices. The airline will buy 25 Airbus A350-900 jets and 25 Airbus A330-900neo jets, to replace its older Boeing 747-400 and 767-300ER models. The Wall Street Journal calls the order “a big victory for the European company in its battle with Boeing to sell long-range passenger aircraft.”

“Delta always approaches fleet decisions with a balance of economic efficiency, customer experience enhancements, network integration and total cost of ownership,” Nat Pieper, Delta’s VP – Fleet Strategy and Transactions, says in a statement. “The A350 and A330neo support our long-haul, transoceanic strategy and join a mix of Boeing and Airbus aircraft that provide exceptional flexibility for Delta’s global network as well as strong cash-on-cash returns for our shareholders.”

Delta says the A350s will fly “primarily on long-range routes between the U.S. and Asia,” where Delta expects the aircraft will give it “a 20% improvement in operating cost per seat compared to the Boeing 747-400 aircraft they will replace.” Delta says it will take delivery of its first A350 in the second quarter of 2017.

As for the A330neos, Delta says they’ll “be deployed on medium-haul trans-Atlantic markets as well as select routes connecting the U.S. West Coast and Asia. The aircraft are scheduled to enter the Delta fleet in 2019 and will deliver a 20% operating cost savings per seat over the Boeing 767-300ER aircraft it will replace.”

News of the deal was first reported by Leeham Co. analyst Scott Hamilton via his Leeham News and Comment blog. Leeham describes the deal as “a major disappointment for Boeing” and “a major coup” for Airbus.

Delta had been a strong Boeing customer in recent decades. On that front, Bloomberg News reminds that “Boeing supported Delta’s bankruptcy restructuring plan in 2007 in the face of a hostile takeover bid by US Airways.”

Still, Delta — which inherited a number of Airbus models via its merger with Northwest — broke with its Boeing trend in 2013, placing a major 40-jet deal with Airbus.

One of the items that apparently tipped the scales in favor of Airbus for this latest order was the early availability of its A330neo model, the updated version of the A330 that Airbus intends to roll out in 2017.

Reuters writes “Airbus emerged as the front-runner in part after it became clear its revamped A330neo could be delivered earlier than Boeing’s temporarily sold-out 787 Dreamliner … .”

The Seattle Times picks up on that theme, saying “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 about 850 outstanding orders for the Dreamliners, and is moving to increase its production levels to meet the demand.

The Times notes that when Delta CEO Richard Anderson was asked in June about the looming widebody order, he said then that “we really need deliveries around 2017, 2018.”

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Cole Goldberg

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