Delta to study order for $4.3b in wide-bodies
Delta Air Lines Inc. (DAL) is considering buying as many as 20 wide- body jets from Airbus SAS or Boeing Co. (BA) with a list value of at least $4.3 billion, people familiar with the matter said.
The order under study is for 10 to 20 Airbus A330s or Boeing 777s, said the people, who declined to be identified because the negotiations are private. Deliveries would start within a few years, one person said. Delta already has both plane types in its fleet.
Purchasing the jets would bridge Delta’s wide-body needs until the end of the decade, when Airbus’s more efficient A350 and Boeing’s 787- 10 Dreamliner will have been in service for several years and would have any kinks worked out, one person said. Delta Chief Executive Officer Richard Anderson has said he prefers buying established models with proven reliability, which are cheaper over the long term even if they consume more fuel. “Delta has the most contrarian fleet strategy in the industry,” said Richard Aboulafia, a vice president at Teal Group, a consulting firm in Fairfax, Virginia. “Others have exuberance for the fuel efficiency race, and Delta is saying there are other ways of getting to the same goal. And it’s working for them.”
Prices for the Airbus and Boeing jets vary according to the planes’ configurations. Airbus lists the A330 at as little as $216.1 million for the -200 model, while the 777-200ER is the cheapest in that family, at $258.8 million. Updated versions cost more, though airlines typically buy at a discount. Delta signaled earlier this month that it might consider new twin-aisle planes, when President Ed Bastian said at a JPMorgan Chase & Co. conference that the airline may find “opportunities in the marketplace selectively to add to our wide bodies.”
Bastian said Atlanta-based Delta would talk to both Airbus and Boeing. Mary Anne Greczyn, a spokeswoman for Airbus, and Marc Birtel, a spokesman for Boeing, declined to comment on any discussions with Delta.