Delta to issue RFP for up to 150 Narrowbodies

surfdog75 · Fri May 19, 2017 4:53 pm

http://r.search.yahoo.com/_ylt=A0SO8wGE ... DoIIkegvI-

From the Puget Sound Business Journal:

Delta eyes big late summer order; analysts don't like Boeing's chances:

Delta Air Lines may issue a request for proposals in August or September as it weighs 74 orders for either Airbus A320neo or Boeing 737 Max jets, plus an extra 75 options on more planes.

Any chance the 757 replacement design could be ready for a late summer/fall request for proposal?

TerminalD · Fri May 19, 2017 5:10 pm

Does anybody else think DL has way too many aircraft types already?

FlyBigDeltaJets · Fri May 19, 2017 5:18 pm

TerminalD wrote:
Does anybody else think DL has way too many aircraft types already?

Nope, large airlines like DL/AA/UA have operation sizes that are of a critical mass that benefits more from having many fleets (and subfleets) of varying capacity rather than having fewer fleet types and not being able to better match capacity to demand.

tlecam · Fri May 19, 2017 5:27 pm

I wonder which existing fleet replacements they're going after? They have 321 and 739's on order, along with the CS100. This seems to be targeting the 150-160 seat gauge?

scbriml · Fri May 19, 2017 5:48 pm

tlecam wrote:
I wonder which existing fleet replacements they're going after? They have 321 and 739's on order, along with the CS100. This seems to be targeting the 150-160 seat gauge?

This RFP will be DL's first order for 'next gen' narrowbodies, so either neo or MAX.

jbs2886 · Fri May 19, 2017 5:54 pm

surfdog75 wrote:
http://r.search.yahoo.com/_ylt=A0SO8wGEIR9ZWQgAZUxXNyoA;_ylu=X3oDMTEyY2VicHNmBGNvbG8DZ3ExBHBvcwMxBHZ0aWQDQjM5MTBfMQRzZWMDc2M-/RV=2/RE=1495241221/RO=10/RU=http%3a%2f%2fwww.bizjournals.com%2fseattle%2fnews%2f2017%2f05%2f19%2fdelta-eyes-big-late-summer-order-analysts-dont.html/RK=1/RS=A_I3OYqe0MFwLheuMzDoIIkegvI-

From the Puget Sound Business Journal:

Delta eyes big late summer order; analysts don't like Boeing's chances:

Delta Air Lines may issue a request for proposals in August or September as it weighs 74 orders for either Airbus A320neo or Boeing 737 Max jets, plus an extra 75 options on more planes.

Any chance the 757 replacement design could be ready for a late summer/fall request for proposal?

What basis do analysts rely on for not liking Boeing's chances?

Edit: three analysts. Leeham (tends to favor Airbus); another guy because "Airbus the better jet" and a third who thinks the MAX is better, but other factors like Boeing's claim against BBD for the C Series DL order. None of which are really strong.

PSU.DTW.SCE · Fri May 19, 2017 5:58 pm

Based on how this reads is that DL hasn't even issued the RFP yet but it expected to later this summer.
Thus responses submitted likely in Q4 with a Q4/Q1 2018 announcement of the order. This sounds like looking out the 2020/2021+ time-frame for deliveries at the tail-end of the current backlong of 739ER & A321 deliveries.

Sounds like this will start to target more replacement frames for older A320s and MD90 plus and additional 757s coming due by then.

ikolkyo · Fri May 19, 2017 6:00 pm

I feel that this will be an A320neo vs 737-8 battle. I'm pulling for the MAX

micstatic · Fri May 19, 2017 6:02 pm

jbs2886 wrote:
surfdog75 wrote:
http://r.search.yahoo.com/_ylt=A0SO8wGEIR9ZWQgAZUxXNyoA;_ylu=X3oDMTEyY2VicHNmBGNvbG8DZ3ExBHBvcwMxBHZ0aWQDQjM5MTBfMQRzZWMDc2M-/RV=2/RE=1495241221/RO=10/RU=http%3a%2f%2fwww.bizjournals.com%2fseattle%2fnews%2f2017%2f05%2f19%2fdelta-eyes-big-late-summer-order-analysts-dont.html/RK=1/RS=A_I3OYqe0MFwLheuMzDoIIkegvI-

What basis do analysts rely on for not liking Boeing's chances?

Edit: three analysts. Leeham (tends to favor Airbus); another guy because "Airbus the better jet" and a third who thinks the MAX is better, but other factors like Boeing's claim against BBD for the C Series DL order. None of which are really strong.

1. I believe in this case Airbus does make the better jet. Have heard this by many others also.
2. Boeing just likely royally pissed off Delta by the antidumping thing.
3. I almost guarentee this goes all airbus

FriscoHeavy · Fri May 19, 2017 6:03 pm

I am also pulling for the MAX. The 738MAX will be an amazing and efficient aircraft.

BN727227Ultra · Fri May 19, 2017 6:15 pm

I think it'll be a 40/35 dealiebobber and both A and B will be pubicly disappointed.

ytz · Fri May 19, 2017 6:21 pm

Bombardier needs a launch customer for the CS500.....

scbriml · Fri May 19, 2017 6:32 pm

BN727227Ultra wrote:
I think it'll be a 40/35 dealiebobber and both A and B will be pubicly disappointed.

R i g h t. :crazy:

ytz wrote:
Bombardier needs a launch customer for the CS500.....

So you think a company in dire straits will respond to an RFP this summer with a plane that doesn't exist? :scratchchin:

airzona11 · Fri May 19, 2017 6:39 pm

scbriml wrote:
BN727227Ultra wrote:
I think it'll be a 40/35 dealiebobber and both A and B will be pubicly disappointed.

R i g h t.

ytz wrote:
Bombardier needs a launch customer for the CS500.....

So you think a company in dire straits will respond to an RFP this summer with a plane that doesn't exist?

Maybe that COMAC potential investment will give them the courage!

wingman · Fri May 19, 2017 6:44 pm

Or Boeing withdraws the Bombardier complaint and they and Bombardier both split the order. Whatever the outcome I'll bet DL pays the lowest price yet for any of the models they choose. The one thing about DL is everyone knows they're deadly serious when they walk away saying they'll just wait another five years. They're the best at making vendors weep into their cornflakes.

william · Fri May 19, 2017 6:50 pm

Yeah, I think Airbus will be very aggressive with this one. Or it may be Bombardier, really depends on the mission of this aircraft. Including Boeing and Airbus in this RFP will guarantee an awesome deal from Bombardier should Delta go that route.

Isn't Mobile suppose to be assembling A320s very soon?

Prost · Fri May 19, 2017 6:52 pm

Question: DL does smaller orders than UA and AA do. Their orders don't garner nearly the attention that those mega orders get, but when the planes reach the properties at their respective airlines, who ends up getting the better deal? I would think the mega orders have a baked in group discount aspect, but DL seems to be able to strike with some precision when the manufacturers order books get lean and negotiate some screaming deals as well.

lightsaber · Fri May 19, 2017 6:52 pm

Opportune timing for heavy discounts. All three airframers will bid. Heck, Embraer will talk just to try and earn a sale.

As to who, anyone could win.

Lightsaber

jbs2886 · Fri May 19, 2017 7:00 pm

micstatic wrote:
jbs2886 wrote:
surfdog75 wrote:
http://r.search.yahoo.com/_ylt=A0SO8wGEIR9ZWQgAZUxXNyoA;_ylu=X3oDMTEyY2VicHNmBGNvbG8DZ3ExBHBvcwMxBHZ0aWQDQjM5MTBfMQRzZWMDc2M-/RV=2/RE=1495241221/RO=10/RU=http%3a%2f%2fwww.bizjournals.com%2fseattle%2fnews%2f2017%2f05%2f19%2fdelta-eyes-big-late-summer-order-analysts-dont.html/RK=1/RS=A_I3OYqe0MFwLheuMzDoIIkegvI-

What basis do analysts rely on for not liking Boeing's chances?

Edit: three analysts. Leeham (tends to favor Airbus); another guy because "Airbus the better jet" and a third who thinks the MAX is better, but other factors like Boeing's claim against BBD for the C Series DL order. None of which are really strong.

1. I believe in this case Airbus does make the better jet. Have heard this by many others also.
2. Boeing just likely royally pissed off Delta by the antidumping thing.
3. I almost guarentee this goes all airbus

None of your three points is strong. Even if Airbus makes a better jet (which is debatable) DL won't pay a huge premium for it if it can get MAXs at a better price. Whether a plane is "better" is really only part of the equation. Second, the BBD thing may not anger DL as much as you think and DL isn't going to just ignore Boeing so Airbus can rip them off...these are businesses. Third, your "guarentee" isn't that strong when its not even spelled correctly.

jbs2886 · Fri May 19, 2017 7:01 pm

lightsaber wrote:
Opportune timing for heavy discounts. All three airframers will bid. Heck, Embraer will talk just to try and earn a sale.

As to who, anyone could win.

Lightsaber

This. This is the precise point...its all going to come down to price and DL is coming in at a very good time. Might even see some 737MAX performance results by then.

Prost · Fri May 19, 2017 7:05 pm

Mentioned in the article, but still based upon rumors, is that Boeing wants to offer the 737-10Max, so I'd assume Airbus offering would be A321 Neo. If true, it seems like Delta is going to have a lot of 180-190 seat planes in their fleet.

keesje · Fri May 19, 2017 7:15 pm

I think the family aspect of the offering will be important.

Therefor the requirement is important, if 130-160 in 3 class (MD's, A320) it will be 738 & A320NEO.

If the A319 and 737-700 are on the line, the moment of truth for the A319NEO and 737-7.5 is there.

A321 NEO's will be in the mix here or later on, maybe LR's.

1337Delta764 · Fri May 19, 2017 7:17 pm

Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

SonomaFlyer · Fri May 19, 2017 7:23 pm

1337Delta764 wrote:
Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

An RFP provides a number of things including exactly what it is DL wants, the number of units and time frame. They then sit back and take meetings from all four manufacturers. They will cajole, play one off against the other and could walk away from all four if they wish. DL is in control of the process.

The size requirements will be interesting. Given their order book, will they RFP another large narrow body? I think it more likely they will be in the middle category which is the 320, 738 size. The trend is bigger planes with the C Series seemingly the most efficient on the smaller size of the spectrum.

Should be a busy summer for sales pitches!

1337Delta764 · Fri May 19, 2017 7:26 pm

SonomaFlyer wrote:
1337Delta764 wrote:
Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

An RFP provides a number of things including exactly what it is DL wants, the number of units and time frame. They then sit back and take meetings from all four manufacturers. They will cajole, play one off against the other and could walk away from all four if they wish. DL is in control of the process.

The size requirements will be interesting. Given their order book, will they RFP another large narrow body? I think it more likely they will be in the middle category which is the 320, 738 size. The trend is bigger planes with the C Series seemingly the most efficient on the smaller size of the spectrum.

Should be a busy summer for sales pitches!

What I meant was if Airbus is guaranteed to win, then an RFP is unnecessary. Otherwise it screams collusion.

keesje · Fri May 19, 2017 7:33 pm

1337Delta764 wrote:
Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

Delta (and NWA before it) never fail to surprize in their fleet choices. If e.g. GECAS / GE / AAR show up with a plan to overhaul / upgrade a fleet of 60-80 young aircraft (e.g. 737-800) coming out of lease and offer a 15 yrs power by the hour, offers to take over some others, Delta is listening.

MrHMSH · Fri May 19, 2017 7:35 pm

1337Delta764 wrote:
Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

What makes you say it's fixed?

1337Delta764 · Fri May 19, 2017 7:37 pm

MrHMSH wrote:
1337Delta764 wrote:
Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

What makes you say it's fixed?

The analysts don't see the order in Boeing's favor and looking at Boeing's recent track record with DL, it seems that DL has lately made fleet decisions mostly on politics rather than price or technical merit.

MrHMSH · Fri May 19, 2017 7:41 pm

1337Delta764 wrote:
The analysts don't see the order in Boeing's favour

The analysts aren't always right. As mentioned above, there are agendas at play.

and looking at Boeing's recent track record with DL, it seems that DL has lately made fleet decisions mostly on politics rather than price or technical merit.

I'm almost certain price is the main driver of DL's purchases, given their reputation and the nature of their recent procurements. What fleet decisions have been made on politics and not price or technical merit that you are talking about?

BoeingGuy · Fri May 19, 2017 7:49 pm

1337Delta764 wrote:
MrHMSH wrote:
1337Delta764 wrote:
Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

What makes you say it's fixed?

The analysts don't see the order in Boeing's favor and looking at Boeing's recent track record with DL, it seems that DL has lately made fleet decisions mostly on politics rather than price or technical merit.

Airlines don't make multi-billion dollar fleet decisions based on "politics" or the CEO's personal grudge (if one exists). They have a responsibility to their shareholders to make the best business decisions.

1337Delta764 · Fri May 19, 2017 7:50 pm

MrHMSH wrote:
1337Delta764 wrote:

I'm almost certain price is the main driver of DL's purchases, given their reputation and the nature of their recent procurements. What fleet decisions have been made on politics and not price or technical merit that you are talking about?

The A330neo was definitely driven by politics; no airline in their right mind would order it over the 787 if politics were not at play.

jbs2886 · Fri May 19, 2017 7:52 pm

1337Delta764 wrote:
MrHMSH wrote:
1337Delta764 wrote:

I'm almost certain price is the main driver of DL's purchases, given their reputation and the nature of their recent procurements. What fleet decisions have been made on politics and not price or technical merit that you are talking about?

The A330neo was definitely driven by politics; no airline in their right mind would order it over the 787 if politics were not at play.

Seriously? That's insane. Price? Delivery schedule? There are a ton of reasons.

MrHMSH · Fri May 19, 2017 7:57 pm

1337Delta764 wrote:
MrHMSH wrote:
1337Delta764 wrote:

I'm almost certain price is the main driver of DL's purchases, given their reputation and the nature of their recent procurements. What fleet decisions have been made on politics and not price or technical merit that you are talking about?

The A330neo was definitely driven by politics; no airline in their right mind would order it over the 787 if politics were not at play.

Unless of course you were conscious of capital costs, wanted it to be available soon, don't need the additional range of the 787 and already operate the A330ceo.

I'm afraid to say that's not a great argument. If DL orders Airbus it's because they're happy with the package Airbus is offering. The 737 has a very good chance to win this one.

Planesmart · Fri May 19, 2017 8:08 pm

1337Delta764 wrote:
SonomaFlyer wrote:
1337Delta764 wrote:
Why is an RFP even necessary if there is a fixed outcome? Sounds like collusion. Might as well place the order right now.

An RFP provides a number of things including exactly what it is DL wants, the number of units and time frame. They then sit back and take meetings from all four manufacturers. They will cajole, play one off against the other and could walk away from all four if they wish. DL is in control of the process.

The size requirements will be interesting. Given their order book, will they RFP another large narrow body? I think it more likely they will be in the middle category which is the 320, 738 size. The trend is bigger planes with the C Series seemingly the most efficient on the smaller size of the spectrum.

Should be a busy summer for sales pitches!

What I meant was if Airbus is guaranteed to win, then an RFP is unnecessary. Otherwise it screams collusion.

Major capital acquisitions are shortlisted and selected all the time using informal RFP's, which never receive any publicity.

When major companies use a published RFP, it's usually to cover potential fallout. That being the case, this could be a purchase at the smaller end of the spectrum, perhaps going to neither Boeing or Airbus.

UA444 · Fri May 19, 2017 8:12 pm

1337Delta764 wrote:
MrHMSH wrote:
1337Delta764 wrote:

I'm almost certain price is the main driver of DL's purchases, given their reputation and the nature of their recent procurements. What fleet decisions have been made on politics and not price or technical merit that you are talking about?

The A330neo was definitely driven by politics; no airline in their right mind would order it over the 787 if politics were not at play.

Other than fleet commonality, delivery schedule, price, maintenance agreements and other info youre not privy too.

Although your argument against the A330 would explain why DL and CO ordered your beloved 764.

Polot · Fri May 19, 2017 8:18 pm

1337Delta764 wrote:
The analysts don't see the order in Boeing's favor and looking at Boeing's recent track record with DL, it seems that DL has lately made fleet decisions mostly on politics rather than price or technical merit.

During the first DL 739 vs A321 RFP everyone and their mother (including everyone on A.net) was convinced DL was going to select the A321...and then Delta ordered a hundred 739s. The point is analysts in the end are making guesses. Educated ones (sometimes how "educated" is debatable though) but guesses nevertheless.

cledaybuck · Fri May 19, 2017 8:26 pm

Why does everyone think DL is going to get a great deal? The backlogs of the 737 and A320 are huge. I am sure DL will get a good deal, but neither A nor B should be excessively discounting these planes.

jbs2886 · Fri May 19, 2017 8:30 pm

cledaybuck wrote:
Why does everyone think DL is going to get a great deal? The backlogs of the 737 and A320 are huge. I am sure DL will get a good deal, but neither A nor B should be excessively discounting these planes.

(1) DL is huge, it is the size order you want, because DL will order more.
(2) Boeing and Airbus are dealing with a significant slowdown in orders and some deferrals (more pronounced at the widebody level, but still impacts narrowbodies).
(3) Boeing and Airbus both (with Airbus even moreso) intend to significantly increase output.

cledaybuck · Fri May 19, 2017 8:50 pm

jbs2886 wrote:
cledaybuck wrote:
Why does everyone think DL is going to get a great deal? The backlogs of the 737 and A320 are huge. I am sure DL will get a good deal, but neither A nor B should be excessively discounting these planes.

(1) DL is huge, it is the size order you want, because DL will order more.
(2) Boeing and Airbus are dealing with a significant slowdown in orders and some deferrals (more pronounced at the widebody level, but still impacts narrowbodies).
(3) Boeing and Airbus both (with Airbus even moreso) intend to significantly increase output.

1. Sure DL is big and it is a fairly big order, but it is not significantly bigger than other orders we have seen. I also wouldn't count on them necessarily ordering more. After all, this is a company that ordered 100 739's and then shortly thereafter ordered A321's. Their current narrow bodies are 73G, 738, 739, A319, A320, A321, MD-88, MD-90, 717, 752, and 753. I don't think commonality is all that important.
2. While there has been an order slowdown, both the 737 and A320 sold more than delivered last year.

gatibosgru · Fri May 19, 2017 8:52 pm

I would love to see DL order some NEOLRs. I could see an A320NEO/A321LR order to replace the aging A320/MD90s.

USAirKid · Fri May 19, 2017 8:53 pm

BoeingGuy wrote:
Airlines don't make multi-billion dollar fleet decisions based on "politics" or the CEO's personal grudge (if one exists). They have a responsibility to their shareholders to make the best business decisions.

Companies don't always have to put shareholders first.

https://hbr.org/2009/07/shareholders-first-not-so-fast

Waterbomber · Fri May 19, 2017 9:12 pm

If this comes to fruition, it has Boeing written all over it.
If Boeing wins in their complaint for unfair trading, Boeing should be able to give a good deal.

Forget the A320. The A320 backlog is huge, with over 11 years worth of production already sold out, regardless of any intended ramp-up. The engine issues are not going to help in the short-term.

The B737 Max should still have slots not too far out.

gatibosgru · Fri May 19, 2017 9:20 pm

1337Delta764 wrote:
MrHMSH wrote:
1337Delta764 wrote:

I'm almost certain price is the main driver of DL's purchases, given their reputation and the nature of their recent procurements. What fleet decisions have been made on politics and not price or technical merit that you are talking about?

The A330neo was definitely driven by politics; no airline in their right mind would order it over the 787 if politics were not at play.

This is quite a statement. If I were you I'd reflect on that and in the future avoid making such nonsense statements because it does not make the slightest sense.

Boeing778X · Fri May 19, 2017 9:44 pm

Why not start adding the CS300? DL is going to have to add the type sooner than later.

SUNCTRY738 · Fri May 19, 2017 9:51 pm

ytz wrote:
Bombardier needs a launch customer for the CS500.....

Good point!

SUNCTRY738 · Fri May 19, 2017 9:53 pm

1337Delta764 wrote:
MrHMSH wrote:
1337Delta764 wrote:

I'm almost certain price is the main driver of DL's purchases, given their reputation and the nature of their recent procurements. What fleet decisions have been made on politics and not price or technical merit that you are talking about?

The A330neo was definitely driven by politics; no airline in their right mind would order it over the 787 if politics were not at play.

Ridiculous statement. The A330neo fits Delta's needs better with a better price just like the A330ceo fit NWA's needs better with a better price than the 777 did during that comparison contest back in the day.

MSPNWA · Fri May 19, 2017 9:54 pm

Delta kicked the narrowbody can down the road, and now they have to make up for it. I've been expecting another large narrowbody order for a while now. DL has hundreds of narrowbodies due for replacement in the not-so-distant future, and their order book is short of what they need.

I definitely would be surprised to see Boeing win this one. Delta and Boeing clearly don't have a friendly relationship these days. And with Bombardier's troubles, I'd be surprised if it's for a CSeries that doesn't exist yet (500). Airbus would be my first guess for more aircraft. Maybe even a deal to convert some of the widebodies for NEOs.

dispatchguy · Fri May 19, 2017 9:59 pm

Waterbomber wrote:

Forget the A320. The A320 backlog is huge, with over 11 years worth of production already sold out, regardless of any intended ramp-up. The engine issues are not going to help in the short-term.

The B737 Max should still have slots not too far out.

Wikipedia states the order count for the MAX exceeds 3700 airframes - what kind of order backlog does that entail?

OA940 · Fri May 19, 2017 10:04 pm

If it's A320/738 size, then the MAX will probably win. It has superior capacity and range, and can already be delivered, which might be a factor for them. If its 321/739 size, the neo has a clear advantage, in that it's superior and has currently the best 757 replacement. Then again, 319/73G size is anyone's guess. But they have some old 150-seaters from Northwest.

Bostrom · Fri May 19, 2017 10:11 pm

OA940 wrote:
If it's A320/738 size, then the MAX will probably win. It has superior capacity and range, and can already be delivered, which might be a factor for them. If its 321/739 size, the neo has a clear advantage, in that it's superior and has currently the best 757 replacement. Then again, 319/73G size is anyone's guess. But they have some old 150-seaters from Northwest.

For the 319/737-700 size, I'd guess the CS300 has a pretty good chance.

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