Delta seeks low prices for widebody aircraft order

Washington DC
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Delta Air Lines will favour low prices as it evaluates widebody types from both Airbus and Boeing for an order of up to 50 aircraft.

“The most clarifying remark I could make is we like very low prices,” says Richard Anderson, chief executive of the Atlanta-based carrier, in response to questions on the status of the order during an earnings call today.

Delta released a request for proposals to Airbus and Boeing for up 50 widebody aircraft in April. It said at the time that it was only considering aircraft currently offered by the airframers, including the Airbus A330-200 and -300, Airbus A350-900 and -1000, Boeing 777-300ER, and Boeing 787-8, -9 and -10.

The aircraft will replace the 16 Boeing 747-400s and a significant number of the 58 Boeing 767-300ERs in the airline’s fleet.

Asked whether Delta is considering the recently launched A330neo, Anderson says: “If it’s priced in the low $80s [million] or high $70s [million], we might be a buyer.”

The A330-800neo costs $242 million and the A330-900neo $275 million at list prices.

However, Anderson’s comments suggest that Delta may be angling for steep discounts on end-of-line current generation A330-200s or A330-300s. Airbus plans to phase out production of the aircraft from 2017 to 2019.

The same logic applies to the 777-300ER, which sees a significant drop in orders during the three years prior to the introduction of the 777X in 2020. Delta could be pushing Boeing for steep discounts on deliveries during those last few years.

Boeing’s 777 delivery schedule falls from 65 in 2016 to 20 in 2017 before bottoming out at seven in 2018 and rising to 15 in 2019, Flightglobal’s Ascend Fleets database shows.

“We’ve got about three years of backlog – firm backlog – on the 777 today,” John Wojick, senior vice-president of global sales and marketing at Boeing, told Flightglobal earlier in July. “We’ve got six years before we get to the 777X. So I’ve got six years to fill three years worth of [backlog].”

Delta plans to make a decision on the widebody order by the end of 2014.