Delta orders 50 Airbus jets, bypassing Boeing

ATLANTA — Delta Air Lines Inc. said Thursday it would acquire 50 new planes from Europe’s Airbus to replace older Boeing Co. jets.

Bloomberg News

Airbus Group NV (AIR) is close to winning an order from Delta Air Lines Inc. (DAL) for as many as 50 wide-body jets valued at about $13 billion, beating competing planes from Boeing Co. (BA), people familiar with the matter said.

The sale would be a mix of Airbus’s A330neo and A350-900 planes, said two of the people, who asked not to be identified because the discussions aren’t public. The purchase with Atlanta-based Delta is still being negotiated and may be announced as early as next week, one person said.

A deal would build on earlier Airbus successes at Delta, including a 40-plane order in 2013 with a list value of $5.6 billion. Delta had favored models from Chicago-based Boeing over Airbus until acquiring Northwest Airlines in 2008. Boeing supported Delta’s bankruptcy restructuring plan in 2007 in the face of a hostile takeover bid by US Airways.

“I view this as great news for the A330neo,” said Michel Merluzeau, an aviation consultant based in Kirkland, Washington. “It gets a big name attached to it” with Delta’s backing, he said by e-mail, while the A350 may have beaten Boeing’s 787-9 Dreamliner because Airbus had more delivery slots available following the cancellation of an order by Emirates Airline.

Photographer: Simon Dawson/Bloomberg

Betsy Talton, a Delta spokeswoman, said the carrier had no comment on its fleet plans. Stefan Schaffrath, a spokesman for Toulouse, France-based Airbus, said the company doesn’t comment on talks with customers, as did Marc Birtel, a Boeing spokesman.

Order Mix

The A330neo is an updated version of the A330, a twin-aisle plane frequently used on trans-Atlantic routes. The all-new A350-900 is due to make its commercial debut with Qatar Airways Ltd. in coming weeks.

Airbus lists the larger of the two A330neo variants for $275 million, while the A350-900’s catalog price is $295 million before the discounts that are customary in the industry. The final valuation of the deal will depend on how aircraft of each type are selected.

Delta sent out requests for proposals for the aircraft in March as part of its effort to retire older wide-bodies that include the four-engine Boeing 747. The last of the 16 jumbo jets will be grounded by 2017, according to Delta, which also plans to stop flying some of its twin-engine Boeing 767-300s.

Subbing out 747 jumbos for the mid-sized Airbus jets “makes sense given Delta’s route structure,” said Richard Aboulafia, an aerospace analyst with Teal Group, a Fairfax, Virginia-based consultant. “I don’t think it’s an endorsement of Airbus’s wide-body competitiveness versus Boeing. On the other hand, this is a nice win.”

A330neo Booster

Chief Executive Officer Richard Anderson has pursued a blend of newer, fuel-efficient jets, such as the A330neo, and older, less-expensive models that can save on capital costs at the world’s third-largest airline. In 2012, Delta agreed to take 88 used Boeing 717s from Southwest Airlines Co.

Delta has been a supporter of the A330neo, with President Ed Bastian publicly urging Airbus to develop the jet almost a month before the planemaker unveiled the model at the Farnborough Air Show in the U.K.

“It certainly fits in with Delta’s view of the market,” Aboulafia said in a telephone interview. “They tend to emphasize capital costs over range, and I’m sure they got a very good deal for the A330neos.”

The A330neo will be outfitted with a redesigned wing and new Rolls-Royce Holdings Plc (RR/) engines to burn 12 percent less fuel than the current A330, according to Airbus.

By sweeping the competition over Boeing, Airbus also handed a victory to Rolls-Royce, the London-based engine maker that is the sole supplier of power plants for both the A330neo and the A350. General Electric Co. (GE) makes engines for the Dreamliner.

Aviation website Leeham News first reported yesterday that Airbus was close to a deal with Delta.