Delta order indicative of urgent fleet needs

Washington DC
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This story is sourced from Flight International
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The recent order of 100 Boeing 737-900ERs by Delta Air Lines reflects an urgency by legacy carriers to replace ageing aircraft, but the airline's decision to go with the -900ER does not preclude it from being an operator of the re-engined 737 Max.

Delta, which first announced the order on 25 August, said separately in a regulatory filing on 30 August that it is cancelling 126 existing options for 737-800s in exchange for an additional 30 options for the -900ER, on top of the 100 firm orders.

The 126 -800 options had comprised 60 options and 66 rolling options, which are assigned delivery slots only when options expire or are exercised. Delta will take delivery of the -900ERs from 2013 through 2018.

The SkyTeam carrier announced the order just days before Boeing rolled out the re-engined 737 Max, which the airframer said has already garnered 496 commitments from five carriers.

American Airlines, which intends to purchase 100 re-engined 737s, with 60 options, will be one of the 737 Max launch customers. Boeing has declined to name the other airlines which have placed orders for the 737 Max, only saying that most are based outside the USA.

Analysts said Delta's order for the -900ER instead of the Max is due to its need to replace its older aircraft quickly, specifically its Boeing MD-88s. Delta has 117 MD-88s as of 30 June, with an average age of 21 years.

"Delta would want to replace them very soon," industry analyst George Hamlin said.

Noting the 73 737-800s that Delta already has in its fleet, Hamlin said it makes sense for the airline to go with the -900ER for similarities in cockpits.

The 737 Max is scheduled to be first delivered in 2017, a timeline that looks "less appealing" for Delta, Teal Group analyst Richard Aboulafia said.

Analyst Steve Hansen, with Raymond James, believes the debate surrounding the orders from Delta and other airlines indicates how "the macro environment is changing pretty rapidly, or at least it is being perceived as changing".

"A lot of North American legacies have obviously been flying old aircraft for a while so there is a point where they have to make those orders," said Hansen.

Boeing said it is open to talking to customers which want to switch to the Max, but Boeing Commercial Airplanes president and chief executive Jim Albaugh said he expects most of them to stick with the 737NG.