Delta Air Lines orders 100 Airbus jets valued at over $12.7 billion

Delta Air Lines has picked Europe’s Airbus over Boeing for a huge order of new jets.

Delta said Thursday that it will order 100 Airbus A321neo jets with a sticker price of $12.7 billion and take an option to buy another 100 jets, a deal that Chicagobased Boeing had hoped to land.

Financial terms of the order were not disclosed so it isn’t known how much Delta will actually pay Airbus. Airlines typically get huge discounts off the sticker price of new planes. Atlanta-based Delta announced the order just before beginning its annual meeting with investors.

CEO Ed Bastian told investors that travel demand remains strong both on international and US routes. He said Delta expects fourth-quarter revenue for every seat flown one mile – a measure of ticket demand and average fares – to rise about 4 percent from a year ago, up from Delta’s previous forecast of 2 to 4 percent.

But costs for fuel and labor are rising, too. Bastian said Delta’s fourth-quarter operating margin will be around 11 percent, at the low end of the company’s previous prediction. Delta’s selection of Airbus jets comes after Boeing challenged a smaller Delta order of planes from Canada’s Bombardier. Boeing charged that the sale price was artificially low and amounted to dumping. The US Commerce Department sided with Boeing and proposed stiff duties on Bombardier jets.

Airbus CEO Tom Enders said the win strengthens a relationship with Delta that his company has built over many years. He said most of the planes would be assembled in Mobile, Alabama. Boeing said it made a “strong but disciplined offer” to Delta.

“Delta remains a valued customer, and we’ll continue exploring ways to best meet their needs in the future,” Boeing spokesman Doug Alder said in an email.