Boeing's attempts to clinch a second big exclusive aircraft deal, similar to the one signed with American Airlines last November, comes at a time when the US manufacturer is trying to persuade regulators on both sides of the Atlantic to approve its merger with McDonnell Douglas.

The company's attempts to convince regulators in the US and Europe that the proposed merger does not fall foul of antitrust laws appears to jar with Boeing desire to sew up another long-term exclusive deal, this time with Delta Air Lines. The move would tie two of the world's three largest airlines (in revenue terms) to the US manufacturer, a fact which sits uncomfortably with the Boeing argument that the merger with McDonnell Douglas would not inflict excessive market concentration.

The Delta order, for up to 100 aircraft worth US$6 billion, is still not concluded and the carrier has been negotiating with both Boeing and Airbus. However, Delta confirmed in mid-March that it was in the final decision-making stages and predicted an announcement could come 'within weeks'.

Boeing appears to have the upper hand, on paper at least. Delta's previous experience with Airbus aircraft was an unhappy one. The carrier acquired A310s with its purchase of Pan Am routes, but was never able to integrate them successfully into a fleet which was dominated by Boeing and Douglas aircraft. Eventually they were dropped.

The re-introduction of another aircraft family into the fleet would also fly in the face of recent cost-cutting efforts, unless Airbus is able to offer substantially lower upfront prices than Boeing.

One analyst suggests the decision is being delayed because of the uncertainty over whether McDonnell Douglas aircraft could be included in a Boeing package. 'Now that it is known the two manufacturers intend to become one, it must be a possibility that Delta is considering,' says the analyst.

Meanwhile the Federal Trade Commission has told Boeing that it needs more information and time to complete its antitrust review of the merger. This move is not necessarily a bad sign for the proposed agreement, as a merger of these proportions demands that the Commission must be seen to be making a thorough investigation. No details have been released on the additional data that the FTC is now seeking.

Boeing's chairman and chief executive, Phil Condit, met with European Union competition commissioner Karel Van Miert in mid-March before an EU investigation into the merger was due to begin. During a grand tour of Europe, Condit urged acceptance of change if the aviation industry is to continue to progress. Condit went on to add that he was confident of receiving US regulatory and shareholder approval of the merger by this summer.


Source: Airline Business