Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Why Didn't Delta Order The 737 MAX?  
User currently offlinelucky777 From United States of America, joined Oct 2008, 545 posts, RR: 0
Posted (2 years 2 weeks 1 day 21 hours ago) and read 16574 times:

I'm just curious why there wasn't an order for the MAX when they also announced the order for 100 737-900's. One has to wonder if Delta isn't putting themselves at a competitive disadvantage in the future flying around the oldest average fleet in the U.S. If i'm not mistaken, AMR has 300+ new aircraft on order and the about the same amount for UAL. Delta, meanwhile, only has the 100 orders for the -900. This of course says nothing of the massive fleet of relatively inefficient MD88/90's Delta has. AMR can't get rid of these aircraft fast enough and yet Delta seems quite content with them.

Indeed, Delta seems to have inherited the former NWA fleet strategy of flying them until the wheels fall off LOL!!!

47 replies: All unread, showing first 25:
 
User currently offlineBraniff747SP From United States of America, joined Oct 2008, 2967 posts, RR: 1
Reply 1, posted (2 years 2 weeks 1 day 21 hours ago) and read 16551 times:

Quoting lucky777 (Thread starter):
90's

The MD-90 and future 717 fleet are not what I would call inefficent. They are good airplanes and they are quite cheap; DL wants as many as they can get.



The 747 will always be the TRUE queen of the skies!
User currently offlineAA737-823 From United States of America, joined Mar 2000, 5731 posts, RR: 11
Reply 2, posted (2 years 2 weeks 1 day 20 hours ago) and read 16524 times:

Quoting lucky777 (Thread starter):
This of course says nothing of the massive fleet of relatively inefficient MD88/90's Delta has.

You cannot lump the 88 and 90 together like that. You must consider that the MD-90 has the same engines as you find on current, modern, in-production Airbus narrowbodies, on a lighter airframe. And the airplanes are dirt cheap to acquire.

Quoting lucky777 (Thread starter):
Indeed, Delta seems to have inherited the former NWA fleet strategy of flying them until the wheels fall off LOL!!!

That strategy worked wonders for NW, there's nothing wrong with DL mimicking it... to a point.

Quoting lucky777 (Thread starter):
If i'm not mistaken, AMR has 300+ new aircraft on order

You're mistaken- it's over 450!!! LOL.


Anyhow, a fleet of 100 739ER's, lots of MD-90s, lots of 717s, and A320s is about the most versatile fleet anyone could hope for. While there are drawbacks to that, there are also benefits.


User currently offlinelucky777 From United States of America, joined Oct 2008, 545 posts, RR: 0
Reply 3, posted (2 years 2 weeks 1 day 20 hours ago) and read 16449 times:

Perhaps I should have just said MD88...but nonetheless, that's still a huge fleet of inefficient aircraft to be flying around when your competitors, who already have a younger and more efficient fleet are getting younger and more efficient by the day...I realize Delta has been hellbent on reducing capital expenditures and paying down their debt load as of late, but and it appears they're ok with a less fuel efficient than their 2 largest rivals...perhaps their reasoning behind the refinery purchase?

User currently offlinePITingres From United States of America, joined Dec 2007, 1124 posts, RR: 13
Reply 4, posted (2 years 2 weeks 1 day 19 hours ago) and read 16189 times:

Money is money. It doesn't matter whether you spend it (or save it) on cap ex or on per-trip things like fuel. Obviously Delta thinks they will be better off long term by spending a little more in fuel today and saving on lease or acquisition payments -- new airplanes aren't cheap!

I think Delta currently only has some 120 MD8x active. That's about 1/7 of their total fleet, I think, and 1/3 of their narrowbody fleet (excluding 757's). When the 717's come in, that number will probably shrink significantly. They will end up with a slightly less fuel efficient fleet (overall) for significantly less capital expenditure.



Fly, you fools! Fly!
User currently onlineghifty From United States of America, joined Jul 2010, 891 posts, RR: 0
Reply 5, posted (2 years 2 weeks 1 day 19 hours ago) and read 16094 times:

Delta announced their 100 739ER order on August 25th.
Boeing's board officially green-lit the 737 MAX on August 30th.

^ That may have a factor.. But:

The 100 frame order is valued around $8.5bn. Had DL opted to order 100 737 MAX 9 instead, they would be paying another $1.6bn (18.6% increase). Considering that the 737 MAX is the newer more desirable offering it can probably command list price, whilst the older less desirable 737NG can only command less than list price. In such a situation, the price gap increases in favor of a 737NG order.

Also, Delta seems to have a "save money now, not later" ethic when it comes to their fleet. Look at how old their current fleet is.. in addition to the fact that they'll be receiving less-efficient but dirt-cheap MD-90s and MD-95s. If the 737 MAX 9 does end up being "16-18% better" than the outgoing A320/737NG, it will still take time for the $$$ saved to be realised. I'm inclined that Delta wanted to save money *now* and saw it fit to order the 18.6% cheaper, proven, and ready 737NG.



Fly Delta Jets
User currently offlinejfk777 From United States of America, joined Aug 2006, 8290 posts, RR: 7
Reply 6, posted (2 years 2 weeks 1 day 18 hours ago) and read 16060 times:
Support Airliners.net - become a First Class Member!

DL's 100 737-900 order is to replace their 757 which are 20 to 25 years old, this is Delta's first fleet concern. Its likely Delta will order the MAX, DL has other fleet needs it has to worry about first. MD-88 are the next fleet group needing to get retired.

User currently offlinekaitak From Ireland, joined Aug 1999, 12411 posts, RR: 37
Reply 7, posted (2 years 2 weeks 1 day 18 hours ago) and read 15943 times:

My initial comment would be "give them a chance"; it's still a new design and with such a varied fleet right now, DL has to crunch a lot of numbers to see how the Max will work (or if it will) and bear in mind whether Boeing will introduce a 737 replacement and when. With such a large NB fleet, replacing every one of them - if they were to replace them all with 737 Max versions - would take several years (and then there are other airlines' requirements to factor in); DL doesn't want to acquire (say) 300 737 Max models, only to find that the type is then superseded by a new Boeing NB. So, my guess is they will go Max at some stage, but not more than 150-200.

With regard to the MD80/90/717, here's a thought. With the acquisition of NW and of the Airtran 717s, DL has probably operated almost every version of the DC9, apart from the -21 (exclusive to SAS); I know NW operated a small number of -41s, but I don't think any of these made it to DL. Starting from '65, it has operated the -10, -30, -50, MD80, MD90 and 717. That's quite a record. And, in 2015, DL will be able to mark 50 years of operations with the DC9 and its successors. I think this is the first time this has ever happened with a major carrier. I hope DL mark it somehow.


User currently offlinehigherflyer From United States of America, joined Oct 2006, 131 posts, RR: 0
Reply 8, posted (2 years 2 weeks 1 day 16 hours ago) and read 15439 times:

Delta will start receiving the 737-900's in early 2013. Delivery and availability were more of an issue for DL management. Considering Boeing's recent history with new airframe programs, the risk of a delay in the 737-9MAX was too great to take a risk. The benefits of a newer design airframe like the 737NG replacing older A320's, MD88's and B757's are big enough to not wait for the new 737MAX program that may or may not be available when promised.

User currently offlinerwy04lga From United States of America, joined Jul 2005, 3176 posts, RR: 8
Reply 9, posted (2 years 2 weeks 1 day 16 hours ago) and read 15390 times:

Maybe I'm wrong, but I think DL inherited some 40s from NWA. I'll go to that party in 2015!


Just accept that some days, you're the pigeon, and other days the statue
User currently offlineMountainFlyer From United States of America, joined Jul 2005, 474 posts, RR: 0
Reply 10, posted (2 years 2 weeks 1 day 15 hours ago) and read 14933 times:

Quoting higherflyer (Reply 8):
Delta will start receiving the 737-900's in early 2013. Delivery and availability were more of an issue for DL management. Considering Boeing's recent history with new airframe programs, the risk of a delay in the 737-9MAX was too great to take a risk. The benefits of a newer design airframe like the 737NG replacing older A320's, MD88's and B757's are big enough to not wait for the new 737MAX program that may or may not be available when promised.

  

Don't forget the 739s are to replace a lot of 752s. The cost of waiting four years (minimum) and extending the life of the inefficient 752s (compared to the 739) would likely far outweigh any efficiency gains by waiting for the MAX.

Rest assured, unless DL completely flips and starts ordering Airbus narrowbodies, DL will order the MAX at some point.



SA-227; B1900; Q200; Q400; CRJ-2,7,9; 717; 727-2; 737-3,4,5,7,8,9; 747-2; 757-2,3; 767-3,4; MD-90; A319, 320; DC-9; DC-1
User currently offlinebigbird From United States of America, joined Aug 2004, 183 posts, RR: 0
Reply 11, posted (2 years 2 weeks 1 day 15 hours ago) and read 14828 times:
Support Airliners.net - become a First Class Member!

DL did operate some of the DC-9-41s. They were phased out at the end of 2010.


bigbird from georgia
User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12128 posts, RR: 51
Reply 12, posted (2 years 2 weeks 1 day 14 hours ago) and read 13690 times:

Quoting lucky777 (Thread starter):
Indeed, Delta seems to have inherited the former NWA fleet strategy of flying them until the wheels fall off
Quoting AA737-823 (Reply 2):
That strategy worked wonders for NW, there's nothing wrong with DL mimicking it... to a point.

Actually that has been DL's policy long before the merger with NW. Look at how long DL kept around the L-1011, B-767-200/-300 non ERs, DC-8, MD-88, DC-9 (pre NW), B-727, B-737-200/-300

Quoting AA737-823 (Reply 2):
Quoting lucky777 (Thread starter):If i'm not mistaken, AMR has 300+ new aircraft on order
You're mistaken- it's over 450!!! LOL.

300 are firm orders, the rest are an MoU.

When DL placed the order last year for the 100 B-737-900ERs they needed them to replace airplanes they will be retiring in 2013 to 2015, mostly older B-757-200s, but some older MD-88s, too. DL will place another NB order, probibly around late 2014 or early 2015, and I'm sure Boeing has told them they will reserve some slots for the B-737MAX earlier in the production phase than what most other airline customers can get.

[Edited 2012-07-16 09:20:27]

User currently offlinestrfyr51 From United States of America, joined Apr 2012, 1099 posts, RR: 1
Reply 13, posted (2 years 2 weeks 1 day 13 hours ago) and read 13386 times:
Support Airliners.net - become a First Class Member!

I don't think Delta has gotten warmed up yet. They'll need to replace their 757's and their MD-88's but they can't Mortgage the farm either while they're reducing long term debt to below $10B. That's more important than ordering new airplanes, and a better use of resources as well. Were they do get their Debt much lower they could possibly service the airplane orders from Incoming cash flow rather than financing the Debt. Remember,, Rich Anderson came from Northwest where they had a policy of OWNING their airplanes outright. But you have to put the Horse before the Cart first. Lower the long term Capital Debt and you call your OWN shots. Smart thinking!!

User currently offlineBurkhard From Germany, joined Nov 2006, 4387 posts, RR: 2
Reply 14, posted (2 years 2 weeks 1 day 13 hours ago) and read 13384 times:

They will do so. Sure. And they will get them when they need them.

User currently offlineneutronstar73 From United States of America, joined Mar 2011, 502 posts, RR: 0
Reply 15, posted (2 years 2 weeks 1 day 13 hours ago) and read 13298 times:

Quoting MountainFlyer (Reply 10):
Don't forget the 739s are to replace a lot of 752s. The cost of waiting four years (minimum) and extending the life of the inefficient 752s (compared to the 739) would likely far outweigh any efficiency gains by waiting for the MAX.

Why, oh why do people call the 757 "inefficient"? And in the same vein, I hear people dust up the 767 as "inefficient". Do people even know what that means or they just like saying that? As compared to what?

And how did the MD90 make it into the "inefficient" category? Might as well say the A320 is, as well. Which, of course, would be ludicrous?

I'm just genuinely curious as to how the calculus stacks up to make the 757 an "inefficient" airliner.....


User currently offlinedtw9 From United States of America, joined Sep 2003, 1155 posts, RR: 2
Reply 16, posted (2 years 2 weeks 1 day 13 hours ago) and read 13267 times:

Quoting KC135TopBoom (Reply 12):
When DL placed the order last year for the 100 B-737-900ERs they needed them to replace airplanes they will be retiring in 2013 to 2015, mostly older B-757-200s, but some older MD-88s, too.

The 737-900er's will replace older 757's and some 767's and A320's. They are not replacements for any MD-88's. In fact there has been recent talk that Delta has been buying Ex-AA MD-80's as a source of spares for the MD-88 fleet.


User currently offlineMountainFlyer From United States of America, joined Jul 2005, 474 posts, RR: 0
Reply 17, posted (2 years 2 weeks 1 day 13 hours ago) and read 13044 times:

Quoting neutronstar73 (Reply 15):
Why, oh why do people call the 757 "inefficient"? And in the same vein, I hear people dust up the 767 as "inefficient". Do people even know what that means or they just like saying that? As compared to what?


The part in parenthesis from my original post says "compared to the 739" answering the question you asked.

The 752 is less efficient than the 739ER. That is a well-known fact. UA reminded us of that when they ordered some of their own just a couple weeks ago.

http://www.bloomberg.com/news/2012-0...ith-14-7-billion-boeing-order.html

Quote:
The 737-900ER is about 15 percent more fuel-efficient than the Boeing 757-200s it will replace...


[Edited 2012-07-16 10:53:02]


SA-227; B1900; Q200; Q400; CRJ-2,7,9; 717; 727-2; 737-3,4,5,7,8,9; 747-2; 757-2,3; 767-3,4; MD-90; A319, 320; DC-9; DC-1
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3589 posts, RR: 10
Reply 18, posted (2 years 2 weeks 1 day 13 hours ago) and read 12691 times:

Quoting dtw9 (Reply 16):

  

The 717s and MD-90s are being used to replace much of the the MD-88 fleet. The 717 and MD-90 both are as efficient in terms of fuel as any NB airliner currently in production.


User currently offlineSmittyOne From , joined Dec 1969, posts, RR:
Reply 19, posted (2 years 2 weeks 1 day 12 hours ago) and read 12653 times:

Quoting neutronstar73 (Reply 15):
Why, oh why do people call the 757 "inefficient"? And in the same vein, I hear people dust up the 767 as "inefficient". Do people even know what that means or they just like saying that? As compared to what?

And how did the MD90 make it into the "inefficient" category? Might as well say the A320 is, as well. Which, of course, would be ludicrous?

I'm just genuinely curious as to how the calculus stacks up to make the 757 an "inefficient" airliner.....

I don't think it's fair to say that the 757 is inherently inefficient (but then again I am a rabid 757 fan).

The issue is that in terms of direct operating costs (fuel, fees etc.) vs. revenue generated a 739 will beat a 752 unless you really need the 752's payload/range advantage for a route. And when you roll in higher maintenance costs of the older planes (incl upcoming heavy checks etc.) and the fact that the 757s cannot fly indefinitely due to cycle limits it starts to become more expensive (financially 'inefficient') to operate the older plane compared to the newer one - even when you take the purchase price of the new one into the equation. I believe that there are tax/depreciation issues involved too but that is over my head.

I think this point is reached later than a lot of people assume, which is why Delta and others hold onto airframes for so long once they are paid for.

Edit: Sorry, Mountainflyer beat me to it.

[Edited 2012-07-16 10:24:07]

User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6586 posts, RR: 24
Reply 20, posted (2 years 2 weeks 1 day 12 hours ago) and read 12585 times:

Quoting DLPMMM (Reply 18):
The 717 and MD-90 both are as efficient in terms of fuel as any NB airliner currently in production.

True, but not as efficient as some of the future aircraft they may compete against. Keep in mind that DL will likely be flying the 717/MD90 well into the 2020's.

DL is taking a calculated risk that the savings they can get from getting used planes now will offset the hits they might take later by having a less fuel efficient fleet. DL also gets an early mover advantage by having a small mainline plane that they can use to upgauge RJ's versus carriers like UA/AA/US that will be relying on high CASM small RJ's for far longer.


User currently offlineAADC10 From United States of America, joined Nov 2004, 2073 posts, RR: 0
Reply 21, posted (2 years 2 weeks 1 day 12 hours ago) and read 12581 times:

Quoting Braniff747SP (Reply 1):
The MD-90 and future 717 fleet are not what I would call inefficent.

While they are better than the really inefficient MD-88, they are still behind the 737 and there are still more than 100 MD-88s left in the fleet. Like AA, DL needs to replace the MD-80s soon and their older 757s, so 100 739s are just relatively short term replacements. DL will need a large number of aircraft and like AA, they will probably have to split the order between Boeing and Airbus because one will not be able to produce the numbers they need.


User currently offlinedtw9 From United States of America, joined Sep 2003, 1155 posts, RR: 2
Reply 22, posted (2 years 2 weeks 1 day 12 hours ago) and read 12386 times:

Quoting DLPMMM (Reply 18):
The 717s and MD-90s are being used to replace much of the the MD-88 fleet. The 717 and MD-90 both are as efficient in terms of fuel as any NB airliner currently in production.

The 88's are not being replaced by 717's or MD-90's. The 90's are the DC-9-50 replacement aircraft. The 717's are the upgage aircraft for the DCI 70/76 seaters that will in turn replace the 50 seaters.If the talk of DL buying Ex-AA MD80's as a source of spares for the MD-88 fleet is true, then that should tell you that the 88's are going to be around for a while. If DL were to retire any 88's, then they would just use those retirements as a source of spares for the remainder of the active fleet.


User currently offlinecatiii From United States of America, joined Mar 2008, 3029 posts, RR: 4
Reply 23, posted (2 years 2 weeks 1 day 12 hours ago) and read 12049 times:

Anderson has stated that "we're not buying shiny new objects," that at the end of the day the goal is to improve P&L and if an existing airframe can meet those goals at the fraction of the cost (i.e. used MD-90s and 717's over new 737MAXs) that diminishes the attractivness of a newer aircraft. Delta puts much more weight on ownership cost in aircraft purchases than on promised efficiency improvements.

User currently offlinexlc From United States of America, joined Apr 2012, 35 posts, RR: 0
Reply 24, posted (2 years 2 weeks 1 day 10 hours ago) and read 11114 times:

Quoting FlyPNS1 (Reply 20):
DL is taking a calculated risk that the savings they can get from getting used planes now will
offset the hits they might take later by having a less fuel efficient fleet.

Which is why they're buying the refinery (http://news.delta.com/index.php?s=43&item=1601). It all fits together: reduce debt, stick with what you own, mitigate against your biggest weakness.

Now they just have to fight the impression that they're flying an outdated fleet (http://www.delta.com/traveling_checkin/inflight_services/products/progress.jsp).


25 Post contains images blueshamu330s : Perhaps this question should be held back until after Delta order the A319 / A320neo ! Rgds
26 planemaker : Another point to investigate is what the average stage length is for the MD80's. Obviously, the shorter the stage length the lower the percentage tha
27 TeamInTheSky : Not that anyone is coming outright and saying that Delta is insane for not ordering new aircraft, but I also see very few heralding or applauding what
28 fpetrutiu : they also aquired a refinery recently... they should be able to produce below market priced Jet A by the end of the year.
29 wjcandee : If planes were free, then yes, they would be at a competitive disadvantage. Any capital expenditure to buy new planes has to be offset by either a ma
30 wjcandee : The MD88s are not so fuel-inefficient as to make it crazy to operate them. Far from it. Again, there is a cost associated with replacing them before
31 DeltaMD90 : They haven't ordered the MAX yet... it's not as if years have passed. It's been a relatively short time since AA and UA's order, I foresee an order in
32 BoeEngr : I just don't think we have seen Delta look at that round yet. I suspect they will, at some point down the road, evaluate both the neo and the MAX and
33 N766UA : What do you mean "didn't?" The airplane was just announced, they have the next 20 years to place an order for it.
34 mayor : I think that perhaps DL didn't order the MAX at the same time as the -900 because the MAX is a few years down the road and they were probably waiting
35 woodsboy : The subject here isnt rocket science, the MD-90 and 717 are perfectly efficient aircraft, as we have discussed here and certainly preform as well as c
36 Post contains links planemaker : The irony of ironies... now because of fracking technology Israel might join OPEC (the OPEC part is a joke but not the fracking in Israel. Some comme
37 727forever : Wow, there is an a lot of MD-88 hating here. I am wondering how many folks who say the -88 must go have flown them or actually know what kind of numbe
38 simairlinenet : I asked COO Steve Gorman this exact question at an employee Q&A last summer, and his answer discussed how Delta didn't want to buy a "paper airpla
39 Post contains images TrijetsRMissed : I think we need a lesson on ROI (return on investment) and NPV (net present value). How many of these threads are we going to read until people get it
40 N328KF : Hardly, when 2/3rds of this type of resource are in the US.
41 Vctony : The 737MAX has been an official product for less than a year. Delta will have a 737MAX order on the books by 2015.
42 phxa340 : Well said. I respect what Delta is doing. I also am happy to see them attempting to pay down debt and keep their cash. With that being said, their RO
43 wjcandee : However, the Israelis can be expected to sensibly manage whatever (largely hypothetical) risk comes from fracking, whereas in the US, some states tha
44 TrijetsRMissed : After going through the thread a second time and reading the posts, I'm pleased to say that their are a number of quality posts by my fellow a.netters
45 AADC10 : Even at $30 per barrel, fuel is still a major airline expense. Airliners have a lifespan of around 25 years, depending on use and conditions, so the
46 rwy04lga : Well said! Close to 4.2 quadrillion barrels Hear hear! It's a learning experience, I am in awe. Just noticed...7 years on A.net, cool[Edited 2012-07-
47 Post contains images mayor : Don't forget the Trainer refinery.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Could Delta Order The 737-700? posted Sat Sep 9 2006 01:22:28 by 1337Delta764
Why Didn't FedEx Buy The 737-900F? posted Sun Jan 8 2006 19:48:52 by OyKIE
Why Didn't Delta Stick With The Rotunda At JFK? posted Sat Feb 4 2012 07:22:16 by washingtonian
Why Didn't DL Order More T7's In The Good Old Days posted Tue Mar 28 2006 10:27:20 by Gokmengs
Market Impact Of The A-320 NEO And The 737 MAX posted Fri Jul 13 2012 07:45:26 by BigJKU
Report: United To Order 100 737 MAX posted Mon Jul 9 2012 14:07:51 by CX747
US Airways 767 Order, Why Didn't They Order 300s posted Sat Mar 10 2012 13:27:32 by delawareusa
Why Didn't US Enter The Haneda Sweepstakes? posted Tue Feb 16 2010 17:18:05 by NetjetsINTL
Why No Winglets On The 737-600? posted Wed Feb 10 2010 09:29:09 by fokkerf28
Why Has Delta Removed The Northwest Name Already? posted Thu Jul 9 2009 21:32:03 by Sankaps