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Aviation History
1988
1988 - 2772.PDF
Delta splits mammoth order Lockheed bids for A320 share by John Bailey in Los Angeles Delta Air Lines has ended weeks of speculation by splitting its mammoth fleet replacement order between Boeing and McDonnell Douglas. The Atlanta-based carrier has placed orders and options for 65 wide-bodied and 150 narrow- bodied aircraft, of which the major portion goes to McDon nell Douglas. Most significant is the order for up to 40 MD-1 Is for Delta's Pacific route network, an order which increases potential sales of the new trijet by more than a quarter. The deal includes firm orders for nine MD-1 Is and options on 31 more, with deliv eries starting in spring 1991. All 40 aircraft would be powered by Pratt & Whitney PW4000 engines. The remaining widebody orders are for nine Boeing 767-300ERs, with options on 16 more. The 767s will be used on Delta's services across the Atlantic, and will also be powered by PW4000s. The narrow-body order is also split between the two manufacturers, with options taken on 100 McDonnell Douglas MD-88s and 50 Boeing 757-200s. These options are in addition to 85 MD-88s, 42 757-200s, and 12 767-300s remaining from previously announced orders and options. Delta puts the total value of the firm orders at $ 1 • 75 billion, but the potential value of the order could exceed $6 billion, outstripping what was pre viously the world's largest commercial aircraft order, the $5-4 billion deal announced in May by the International Lease Financing Corporation (ILFC). McDonnell Douglas will not confirm the potential total value of its share of the order, and late last week was unable to confirm whether Delta had reserved the right to convert some of the MD-88 options into commit ment for MD-90 propfans at a later date. Total orders, options, and reservations for the MD-11 now stand at 191, 53 of which are firm orders. The first MD-11, destined for Federal Express, will roll out on March 2, 1989, ready for a first flight in April of that year. McDonnell Douglas recently revealed plans to launch a 35ft-stretched, 368-seat capac ity, 7,000 n.m.-range MD-11, called the Super Stretch. by Dave Higdon in Washington D.C. Lockheed has submitted a proposal to Airbus Industrie to build A320 airliners, including a possible stretched version, in the USA. Airbus executives in Toulouse appear to have re acted favourably to the pro posal, submitted at the end of August. Lockheed declines to divulge the contents of its proposal "for competitive reasons". A decision is expected before the year's end. Airbus executives are equally mute, only confirming receipt of the Lockheed proposal and acknowledging that talks with the company, and with McDon nell Douglas, are continuing. McDonnell Douglas faces daunting obstacles in its effort to secure a similar partnership with Airbus, primarily because of competition on conflicts which do not exist between Lockheed and the European consortium. Lockheed submitted a pro posal to take on the manu facturing of Airbus Industrie's most successful product in an effort to capture some of the billions of Dollars worth of busi ness expected to be generated by burgeoning commercial air craft sales. Lockheed decided to leave the commercial aircraft busi ness in 1981, and in 1984 delivered the last of some 250 L-1011 TriStars, the product which almost brought the corporation to financial ruin in the 1970s. Airbus holds orders and options for more than 850 aircraft worth an estimated $23 billion. The A320 alone accounts for about 320 of the firm orders, and is effectively sold out until 1993. That is a likely handicap when trying to attract new orders, concedes Airbus Industrie North Amer ica, the consortium's marketing subsidiary headquartered near Washington D.C. Reaching an agreement with Airbus would return Lockheed to the commercial realm, albeit as the builder of another company's design. Such an accord would counter the economic impact of a shrinking US defence budget. Lockheed plans to use facilities at Lockheed-Georgia, where construction of the C-5B airlifter ends later this year, to build the A320. The large order backlog of A320s, a smaller backlog of A300 and A310 widebody twins, and continuing devel opment of two new aircraft are beginning to cramp Airbus' production capability. Both the . cost of expanding the Toulouse facility and Europe's different social struc ture present other obstacles to a larger production line. "We cannot add employees and later lay them off the way American companies can," Airbus notes. Airbus' main competitor sees little potential for such a part nership changing the global competitive picture. "It proba bly would be advantageous for Airbus to establish a partnership with an American firm," con cedes Boeing, "but we believe we have the product line to maintain our traditional lead ership within the industry." Since Airbus announced the A320 programme, five years ago, Boeing's sales of the 737 and 757 have held their own, with 51 per cent of the medium- range market versus 25 per cent for the Douglas MD-80 series and 10 per cent for the A320. McDonnell Douglas acknowl edges that further talks with Airbus are also planned, but the gap between them is substantial. Douglas wants Airbus to drop the long-range A340 as part of the condition for a partnership, a move Airbus has already ruled out. The A340 is viewed as a competitor to Douglas' MD-11. 2 FLIGHT INTERNATIONAL, 1 October 1988
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