Delta has just placed a massive order for Airbus A321neo aircraft. Specifically, Delta has a firm order for 100 Airbus A321neo aircraft, and options for a further 100 of the plane. Deliveries for the plane will begin in 2020, and are expected through 2023. Delta plans to configure these A321neos with 197 seats, including 20 first class seats, 30 Delta Comfort+ seats, and 147 economy seats.
At list prices this order is valued at over 12 billion USD, so this is a big win for Airbus. For those of you not familiar, the A321 is the biggest plane in the Airbus narrowbody family, and the “neo” part means that it features the new engine option, which improves the fuel efficiency and range of the aircraft. In some cases the A321neo can even be used to operate transatlantic flights.
Here’s what Ed Bastian, Delta’s CEO, has to say about the deal:
“This is the right transaction at the right time for our customers, our employees and our shareholders. Delta, Airbus and Pratt & Whitney share the same commitment to safety, efficiency, innovation and continuously improving the customer experience. This order for the state-of-the-art A321neo with Pratt’s Pure Power next-generation jet engines reflects our long-term commitment to these values for Delta people and all our constituents.”
Meanwhile here’s what Airbus’ COO has to say:
“The A321neo will equip Delta employees with a customer-preferred, versatile narrowbody aircraft befitting their position as a global airline leader — and we are excited to continue to partner with them as they deliver industry-leading operational performance, customer satisfaction and financial results. This purchase furthers our commitment to U.S. aviation — a commitment that has never been stronger. Today, there is more U.S. content in Airbus aircraft than from any other country, with more than 40 percent of our aircraft-related procurement coming from the United States. In addition, our workforce at the U.S. Manufacturing Facility in Mobile, Alabama is proud that they will be delivering many of these A321neos to Delta in the coming years.”
In terms of Delta’s current narrowbody aircraft orders, they have 92 Airbus A321s (non-neo) to be delivered through 2021, 42 Boeing 737-900ERs to be delivered through 2019, and 75 CSeries 100 aircraft to be delivered starting next Spring (at least in theory, though it looks like some of those aircraft may be going to Aeromexico).
Some of you may remember the recent controversy surrounding Delta’s Bombardier CSeries order. Specifically, Boeing filed a complaint with the US Commerce Department, asserting that Bombardier was getting illegal subsidies from the Canadian government and dumping its product (specifically, the CSeries aircraft) into the US market.
The government ended up siding with Boeing, meaning that they wanted to levy huge taxes on the aircraft, which Delta obviously wasn’t happy about. It looks like Airbus will be taking over the CSeries program and building some of the planes in the US as a way of getting around that, though the deal is only expected to close later this year.
While I wouldn’t go so far as to say that an order with Airbus over Boeing is retaliation, I’m sure Delta is happy that they can tell Boeing to “shove it” in this case. In reality, Boeing doesn’t really have a real competitor to the A321. They have the 737-900, but that’s still quite a bit smaller.
The irony in all of this, however, is that in the battle between the US and Gulf carriers, Delta constantly stresses the importance of American jobs, arguing how the Gulf carriers lead to American job losses, etc.
Meanwhile here’s Delta spending billions of dollars with a European aircraft manufacturer over Boeing. I’d love to know how many jobs that’s “sending overseas,” per Delta’s wonky math. Meanwhile the Gulf carriers are huge customers of Boeing’s.
What do you make of Delta’s big Airbus A321neo order?
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