National Post (National Edition)
Delta picks Airbus over Boeing in $12.7B deal
Places order for 100 jets, option for 100 more
Boeing Co. was dealt another major blow this week as Delta Air Lines Inc. confirmed Thursday it will order 100 jets from its aerospace rival, a deal valued at around US$12.7 billion.
Delta announced it will order 100 A321neo singleaisle jets, with an option for 100 more, from France-based Airbus SE. The Atlantabased airline expects deliveries of the aircraft, powered by Pratt & Whitney gearedturbofan engines, to begin in 2020 through 2023.
The order marks a setback for Boeing, as Delta had reportedly been considering its 737 Max 10 aircraft for the substantial deal.
“This is the right transaction at the right time for our customers, employees and our shareholders,” Delta chief executive Ed Bastian said in a statement. Boeing is in the midst of a bitter trade spat with Bombardier Inc. that has put Delta’s order for 75 CSeries aircraft at the heart of the dispute.
Delta has sided with Bombardier, with Bastian previously calling the case “unrealistic” and “nonsensical.”
Boeing has alleged that massive government subsidies have allowed Bombardier to dump the CSeries into the U.S. market at an “absurdly low” cost. The U.S. Department of Commerce hit Bombardier with a 300-per-cent preliminary duty on the jet, effectively preventing Delta from adding the plane to its fleet.
Airbus said the A321neo jets will be manufactured at its production facility in Mobile, Ala., the same location where Bombardier’s U.S.-bound CSeries jets are expected to be produced. In November, Bombardier announced that Airbus would take control of the CSeries program and produce U.S.bound CSeries jets at its facility in Alabama.
“We at Airbus are very happy we won this hotlycontested campaign, together with our partner Pratt, and we are proud to serve Delta with the A321neo,” Airbus chief executive Tom Enders said in a statement.
Scott Hamilton, an aviation analyst with Leeham Co., said the order for 100 jets is “a generational deal.”
“With 100 order and 100 options, that pretty well takes care of Delta’s singleaisle jet requirements,” Hamilton said.
The order announcement comes two days after the Canadian government confirmed it ditched its plans to buy 18 Super Hornets from Boeing and will instead purchase 18 second-hand F-18s from Australia. The government also launched its program to buy up to $19-billion worth of new fighter jets, which includes a provision that appears to be a warning to Boeing in that “any bidder that is responsible for harm to Canada’s economic interests will be at a distinct disadvantage.”
The U.K. has also previously warned that Boeing could lose out on British contracts in the future as a result of the trade spat.