rising
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 7:48 pm

Delta Air Lines CEO Richard Anderson had some interesting comments on the carrier's fleet options.

Looks like the company plans to wait to see the performance of the 737 Max and A320neo before looking at orders. The Company does have the option to convert 40 of their 100 739 order from 2011 to the Max should they choose.

"The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."

In regard to the Airbus A330/787, Anderson commented, "We operate 33 A330s and were a launch customer in the U.S.," Delta's Anderson said. He added that should Boeing hope that its stretched 787 will take sales from the A330, "its prices have to come way down."

Source: Reuters

Link: http://www.cnbc.com/id/100759006
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AeroWesty
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 7:54 pm

Quoting rising (Thread starter):
"But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."

That surprises me. In nearly every other industry, total cost of operation is pretty much standard. In the industry I'm in, which is capital intensive to break into, the tax treatment of various purchasing options for the customer is always a part of the sales presentation.
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flyinggoat
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 8:03 pm

This makes me wonder if perhaps DL is looking at the C series as well. The C series would be a very nice fit for them.

As far as the 787 goes, my opinion is that Delta will have them eventually, and I think the 787-8/9/10 will be the bread and butter of their international fleet. I would not be surprised to see 50+ 787s in their fleet 15-20 years from now.
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 8:26 pm

Quoting FlyingGoat (Reply 2):
This makes me wonder if perhaps DL is looking at the C series as well. The C series would be a very nice fit for them.

With DL getting the 717s from AirTran, I don't see a CSeries order anytime soon.

For the 787, I expect DL will likely place a separate order for the 789 with GEnx engines, and perhaps sell off the existing 788 order.
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Rdh3e
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 8:37 pm

Quoting 1337Delta764 (Reply 3):
For the 787, I expect DL will likely place a separate order for the 789 with GEnx engines, and perhaps sell off the existing 788 order.

As opposed to just upping their 788s to 789s? Why would they do that?
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 8:51 pm

It sounds like DL did not get the deal they were looking for. Perhaps they want a lower price than what UA and AA got.
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 8:52 pm

Quoting rising (Thread starter):
"The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."

Well to be fair, the capital cost is never actually known until the end of the sale process. It is all part of the negotiation, it is all part of the real calculation that goes on internally in the airline during the sales process where the airline is evaluating at what cost a buy will make sense. The airline uses what prices are determined to work as their base line to decide whether or not the salesman with his charts will get the sale.

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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 9:02 pm

Quoting RDH3E (Reply 4):
As opposed to just upping their 788s to 789s? Why would they do that?

DL always goes for the best engine available at the time (as they did with the 767 and 772ER), and the GEnx is currently the superior engine for the 787. Doing this way DL can get the aircraft and engines they want without violating the contract that NW had with RR. GE is also one of DL's financers.
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deltal1011man
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 9:31 pm

Quoting FlyingGoat (Reply 2):
This makes me wonder if perhaps DL is looking at the C series as well. The C series would be a very nice fit for them.

no need. they have the 717.

Quoting 1337Delta764 (Reply 3):
For the 787, I expect DL will likely place a separate order for the 789 with GEnx engines, and perhaps sell off the existing 788 order.

Highly unlikely that the Trents don't happen with Delta. UA and AA are both going GEnx, Rolls will likely offer Delta a deal that can't be matched by GE.

Could also mean a Trent 1000 line for TechOps.

Quoting RDH3E (Reply 4):
As opposed to just upping their 788s to 789s? Why would they do that?

because the CF6 powers the 764....thus anything GE makes is gold.

Quoting 1337Delta764 (Reply 7):
GE is also one of DL's financers.

what do you mean by this? GE doesn't own any Delta stock that is large enough to show up on yahoo.

Quoting 1337Delta764 (Reply 7):
Doing this way DL can get the aircraft and engines they want without violating the contract that NW had with RR.

They still have to cancel the RR contract. Even if they "sell" 18 as you say they still have options and other parts of the deal that would have to be worked out.

You know that with the BR715s, T800s, and V2500s Delta has a very large Rolls fleet now. GE will still have 150-200 more Delta engines but it is very close. Delta and Rolls will have a nice relationship in the future.

Quoting 1337Delta764 (Reply 7):
DL always goes for the best engine available at the time (as they did with the 767 and 772ER), and the GEnx is currently the superior engine for the 787.

You can't tell me, or anyone, that the GEnx will be the "superior" engine when Delta takes 787s. Just because the CF6 powers the 764 that doesn't mean that Delta is going to order nothing but GE engines from now on. Rolls could very well put together a package that keeps RRs on the 787s. This could mean financing, possible MRO contract for Delta TechOps (or very very good terms on a power by the hour agreement, but lets hope its a MRO contract for TechOps)

IMHO at best you'll get a split order. I just can't see GE being able, or willing to, beat the terms Rolls is likely to offer DL to be the only US 787 customer. AA signing the deal to have GE lease the 787s to them with GEnx engines, IMO, sealed the deal.

Quoting rising (Thread starter):

Looks like the company plans to wait to see the performance of the 737 Max and A320neo before looking at orders. The Company does have the option to convert 40 of their 100 739 order from 2011 to the Max should they choose.

Pretty much the Delta thing now. Wait and see then pick one. Can't argue the point honestly. The MAX likely wont be "that"much better than late built NGs.

Quoting rising (Thread starter):

"The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."

I think this is something people tend to forget. Delta's plan is to buy airplanes so the capital cost plays a big factor to them. This was a key reason Boeing got the 737-900ER order.
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 9:56 pm

Quoting Deltal1011man (Reply 8):
V2500s

Sorry, but RR is no longer part of the IAE consortium.

Quoting Deltal1011man (Reply 8):
because the CF6 powers the 764....thus anything GE makes is gold.

And the newer 763ERs, and the 772LRs, and in part on the 737NG and A32x fleet. We know you are a die-hard RR fan since they were the exclusive engine on the L-1011. Sorry, but the relationship with GE is obviously the stronger relationship.

BTW, DL could have ordered the Pratt & Whitney PW4062 engine instead for the 764ER, however, they chose the CF6-80C2B8F because it was the superior engine.

[Edited 2013-05-22 15:00:37]
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Stitch
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 10:05 pm

Quoting AADC10 (Reply 5):
It sounds like DL did not get the deal they were looking for. Perhaps they want a lower price than what UA and AA got.

Looking through Delta's SEC filings of 31 August 2011, Jon Ostrower with the WSJ projected that they received a 51% discount on their 737-900ER order (airframe and engines).

As for the 787-8 order, NW was an early customer and it appears that they will pay $139 million a piece for them based on those same DL SEC filings noting they had $2.5 billion in aircraft purchase commitments from 2020 to 2022 that related to 18 787-8 aircraft.
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 10:10 pm

Quoting 1337Delta764 (Reply 9):
We know you are a die-hard RR fan since they were the exclusive engine on the L-1011.

Again, for the last time, as long as Delta fixes it, I couldn't honestly give two s...craps what they fly or who makes it. Do you understand now. I can't possibly type it any slower.

Quoting 1337Delta764 (Reply 9):
Sorry, but RR is no longer part of the IAE consortium.

While they sold the stake, RR is still a part of the V2500 engine. A good chunk of the engine came from them.

Quoting 1337Delta764 (Reply 9):
and the 772LRs,

No choice. On the 777s they could pick an engine they have Rolls.

Quoting 1337Delta764 (Reply 9):
And the newer 763ERs,

Uh its not like the PW4000 fleet is "old" but again, you're basing your comments on something that happened 10 years ago?.....really?

Quoting 1337Delta764 (Reply 9):
and in part on the 737NG

Who else were they going to pick?

Quoting 1337Delta764 (Reply 9):
and A32x fleet.

NW order, not Delta.

Quoting 1337Delta764 (Reply 9):
Sorry, but the relationship with GE is obviously the stronger relationship.

please, provide proof of this.
But you're not using logic so it doesn't really matter. I honestly wish you knew as much as you think you do.
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roseflyer
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 10:10 pm

This isn’t that much of a surprise. Delta is following the Northwest model of keeping airplane capital costs low by acquiring used airplanes and holding its fleet longer. It’s been acquiring reasonably efficient 717s and MD90s that no one else wanted. The 737-900ERs are some of the last off the line and would have come with a big discount that Boeing would not offer on the MAX. Delta pays the price with higher fuel burn and maintenance, but obviously they have made the evaluation that expensive new airplanes are not their best option.
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 10:11 pm

Quoting rising (Thread starter):

"The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."
> This man deserves a Nobel prize here.

Boeing always says the 787 is "sooo much cheaper to operate"

But it depends on the specifics. Delta seems happy with their 763ER Winglets. Which is "cheaper?" Maybe RA is telling us.

Quoting Deltal1011man (Reply 8):
what do you mean by this? GE doesn't own any Delta stock that is large enough to show up on yahoo.

GE Capital undoubtedly works with Delta (ie 77L) as a money lender for engines, and anything else.
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 10:17 pm

Quoting 1337Delta764 (Reply 3):
With DL getting the 717s from AirTran, I don't see a CSeries order anytime soon.
Quoting Deltal1011man (Reply 8):
no need. they have the 717.

I had a brain fart and totally forgot about the 717s. I agree then, not much room for the C Series. Maybe one day...   
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 10:21 pm

Quoting Flighty (Reply 13):
GE Capital undoubtedly works with Delta (ie 77L) as a money lender for engines, and anything else.

Which is why GE could offer DL a good deal on 787 engines. DL doesn't get any such benefit from RR.
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 10:47 pm

Quoting FlyingGoat (Reply 2):
This makes me wonder if perhaps DL is looking at the C series as well.

We all know what they are looking for: MD-90s, MD-95s (err, 717s), DC-9s, anything with Douglas heritage!
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ghifty
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:00 pm

No surprise here!

Quoting Flighty (Reply 13):
Boeing always says the 787 is "sooo much cheaper to operate"

But it depends on the specifics. Delta seems happy with their 763ER Winglets. Which is "cheaper?" Maybe RA is telling us.

The 787 really is "sooo much cheaper to operate." That's not debatable. Nor is the fact that ordering new-build 787s has a greater financial burden than continuing to operate already-owned 767s. RA, and Delta in general, is looking at the bigger picture.

I posted about this before when Delta ordered 737-900ERs instead of the MAX, and I'm not sure just how accurate the numbers are.. but:

737MAX is projected to be 14-16% more efficient than 737NG.. 739M costs about 12% more than current-build 739s. Once you consider other costs, it would seem the 737NG and 737MAX are about the same price in the long-run.. with the 737NG being cheaper in the short-run.

Quoting 1337Delta764 (Reply 3):
With DL getting the 717s from AirTran, I don't see a CSeries order anytime soon.

   If anything, I could even see DL getting a bunch of old E-jets..

[Edited 2013-05-22 16:03:37]
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roseflyer
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:03 pm

Quoting ghifty (Reply 17):
737MAX is projected to be 14-16% more efficient than 737NG.. 739M costs about 12% more than current-build 739s. Once you consider other costs, it would seem the 737NG and 737MAX are about the same price in the long-run.. with the 737NG being cheaper in the short-run.

If Boeing was smart and acted completely as an independent company interested in maximizing profit, the total lifecycle costs for the 737-900ER would be the same as the 737 MAX-9. That means for all the dollars that were saved with the MAX's operating efficiency improvements, the purchase price would be equivalently raised. That doesn't actually happen in real life with imperfect competition, but on paper, it makes economic sense.
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catiii
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:14 pm

Quoting FlyingGoat (Reply 2):

Just because he didn't specifically exclude the C Series, doesn't mean they're considering it. In fact, if any airframe out of the MAX, NEO, or C Series needs performance proving it 's the C Series.

Quoting ghifty (Reply 17):

Maybe they'll buy the B6 E fleet when it's time to replace the 717s  
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:16 pm

Quoting Roseflyer (Reply 18):
That doesn't actually happen in real life with imperfect competition, but on paper, it makes economic sense.

   Makes sense.

It's hard for me to accurately construe anything since neither Boeing nor Delta releases the actual price of aircraft sold/purchased. What is list price even used for..?

Quoting catiii (Reply 19):
Maybe they'll buy the B6 E fleet when it's time to replace the 717s  

And then purchase T5 and move out of T2..      

[Edited 2013-05-22 16:19:17]
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deltal1011man
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:18 pm

Quoting 1337Delta764 (Reply 15):

So your saying rolls doesn't offer power by the hour on the Trent 1000?

Oh and the BR715 engines are all power by the hour and owned by RR. So clearly they can do so

Quoting Flighty (Reply 13):

Ah probably true. Not sure who owns those engines. (Always forget about them)
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:20 pm

Quoting Roseflyer (Reply 12):
Delta pays the price with higher fuel burn and maintenance, but obviously they have made the evaluation that expensive new airplanes are not their best option.

Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.
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ghifty
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:23 pm

Quoting DocLightning (Reply 22):
Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.

It is working. Cuts CAPEX (is this the right term?) immensely.

I think it's at variance.. because it simply can be. Where else would FL's 717s have gone? Or the ex-TW 757s? Or those MD-90s? If UA/AA wanted them.. DL's model wouldn't be sustainable, but they don't so it is.
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lucky777
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:30 pm

Quoting DocLightning (Reply 22):
Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.

Indeed...i would have to assume Delta and AA and UA (along with Southwest, jetBlue etc....) have looked at the exact same numbers with regards to aircraft and come to vastly different outcomes. Delta operates more like an upstart that scours the globe for used aircraft that the majors no longer have a need for wherease AA and UA have been ordering new aircraft by the boatload.
 
LAXintl
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:32 pm

Quoting rising (Thread starter):
He added that should Boeing hope that its stretched 787 will take sales from the A330, "its prices have to come way down."

Except the A330 does not compete with the 787. The A330 is of course cheaper as result. More appropriate comparison would be 350 vs 787.
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:36 pm

Quoting DocLightning (Reply 22):
I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.

Having a variance in a fleet makes it possible/easier for Delta to add used/second market aircraft to the fleet at its leisure.
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LAXintl
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:49 pm

If you want power-by-hour on the 787, you need to sign up for the Boeing Gold Care solution.

GoldCare features engine support option with either the GE's OnPoint solution for the GEnx engines, or RR's integrated lifecycle support for the Trent 1000.

I don't believe manufacturers can offer the power-by-hour solution independently on the engines. This can be a bit of a turn off for large clients that might want engine care, but are seek to do the airframe support via inhouse resources.
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:50 pm

Quoting LAXintl (Reply 25):
Except the A330 does not compete with the 787.

It sure does, especially on the short routes where the B787 long range capabilities are a disadvantage.

Quoting LAXintl (Reply 25):
The A330 is of course cheaper as result.

Which is exactly why it is competing with the B787, and even with the A350-800.

Quoting LAXintl (Reply 25):
More appropriate comparison would be 350 vs 787.

Of course, but both these planes are mainly targeting customers who want to fly them long range, although there will be some exceptions of course.

Regarding the B737-MAX, or the A320-NEO, Delta wants to wait and see (or hear) about the real data when the aircraft are in service at the airlines who ordered them first. If these numbers add up, they probably will order either the B737-MAX, or the A320-NEO, or both.  Wink

[Edited 2013-05-22 16:52:19]
 
LAXintl
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Wed May 22, 2013 11:57 pm

Quoting EPA001 (Reply 28):
It sure does, especially on the short routes where the B787 long range capabilities are a disadvantage.

That's like saying Honda competes with Mercedes. Sure both will get you from A to B and the Honda could be suitable for many clients, but at the end they are a different class of vehicle.

So if the A330 was so good, Airbus would have not turned to the A350. You might actually remember how turned off the market was to the proposed A330NG as it would fall far short of the promised 787.

If DL wants to compare the A330 to the 787, they can have fun doing it, but it would be like comparing then the 767 to the A350. At the end its apples and oranges and the market pricing reflects this.
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eastern747
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 12:10 am

Ok,,,,,,,What is a 737Max and 320 whatever?
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 1:00 am

Quoting EPA001 (Reply 28):
If you want power-by-hour on the 787, you need to sign up for the Boeing Gold Care solution.

GoldCare features engine support option with either the GE's OnPoint solution for the GEnx engines, or RR's integrated lifecycle support for the Trent 1000.

Not true, the engine PBH deals & Gold Care can be separated. Some airlines have gone for LHT/AFI/BA for airframe/ component PBH support, and engine manufacturer for engine PBH
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 1:13 am

Quoting LAXintl (Reply 29):
That's like saying Honda competes with Mercedes. Sure both will get you from A to B and the Honda could be suitable for many clients, but at the end they are a different class of vehicle.So if the A330 was so good, Airbus would have not turned to the A350. You might actually remember how turned off the market was to the proposed A330NG as it would fall far short of the promised 787.If DL wants to compare the A330 to the 787, they can have fun doing it, but it would be like comparing then the 767 to the A350. At the end its apples and oranges and the market pricing reflects this.

It's all apples and oranges. The airline chooses the plane that's fit's their needs, their business model and price. Which is why A330 manufacturing is expanding. The 787 offers abilities at a price that don't suit some airlines needs. Sometimes they want an apple, sometimes they want an orange. The A350 is not supposed to be just an A330 replacement, but a more capable plane that can also take on the 777W. So it's pricing/capability mix will fit into another area of need for airlines.
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 1:54 am

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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 2:26 am

Quoting 1337Delta764 (Reply 7):
DL always goes for the best engine available at the time (as they did with the 767 and 772ER), and the GEnx is currently the superior engine for the 787.

How is the GEnx superior, and what makes you think that DL decision makers have that view?

Quoting 1337Delta764 (Reply 9):
Sorry, but the relationship with GE is obviously the stronger relationship.

I don't see how you could have reached this conclusion.

Quoting Deltal1011man (Reply 11):

No choice. On the 777s they could pick an engine they have Rolls.

It's worth noting that the constant difficulties with GE90 reliability have strongly reinforced the perception that the Trent was the right choice on the 77E.

Quoting DocLightning (Reply 22):
Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.

Yes, capital discipline and focus on shareholder value are extremely odd relative to DL's competitive set. Probably explains why DL doesn't really measure itself against UA/AA except when evaluating operational performance.
 
deltal1011man
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 2:32 am

Quoting Flighty (Reply 13):
But it depends on the specifics. Delta seems happy with their 763ER Winglets. Which is "cheaper?" Maybe RA is telling us.

For Delta's needs I bet the low ownership cost and fairly low MX numbers is playing a big part of it.

Over time the the 767-300ERs will have to be replaced mostly by 787-8s. As the 767 fleet ages the 18 787-8 orders can start to come in and replace them. Also the 787-9 will be the perfect replacement for the 764s and 332s when that day comes.
I imagine the 777-8/9 and or 787-10 will replace the 777-200s and 333s.
The question is, Delta is basically out of 12+ hour capacity. 777/744 fleet is maxed out, and they may be able to get one more longer haul route out of the 332 fleet. Possibilities in the growth market(mostly Asia) are really becoming limited for the 767 also. (SEA-ICN,NGO and LAX-Japan are about that they have left that is really possible)
So does Delta try to get more 777s and/or 332s or do do they go with the somewhat smaller 787. (or don't bother growing till 2020)
another thing that plays into it, Delta is nicely below its min. in its JV agreement with its pilots. At some point they will have to cut a deal or make a nice little push back into Europe, this will also have a large effect on the 767 fleet.

Quoting ghifty (Reply 23):
t is working. Cuts CAPEX (is this the right term?) immensely.

it is working. The M90s and 717 have fuel burn number comparable to the A320 and the JT8D-200s fuel burn is being offset by next to nothing ownership cost of the 88s. (and MX cost are going somewhat down as Delta looks to the scrap market for parts) Limited replacement for the oldest frames in the fleet are around the corner with 739s.

Quoting DocLightning (Reply 22):

Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.

It works for DL because they had the M90 already in fleet. Its a stop gap, but DL is saving a ton of money on them compared to the new shiny jet prices AA and UA (and US) are paying.

the same thing goes for the 717. Both the MD90 and 717s are tanks that can likely fly for another 15-20 years too.

Quoting LAXintl (Reply 27):
I don't believe manufacturers can offer the power-by-hour solution independently on the engines. This can be a bit of a turn off for large clients that might want engine care, but are seek to do the airframe support via inhouse resources.

I would bet RR and GE can do power by the hour without Beoing.

Quoting LAXintl (Reply 27):
you need to sign up for the Boeing Gold Care solution.

At one point TechOps(pre-merger) was trying to become a Gold Care provider. At the time they would also be going after whatever engine they operated (or both engines if they spilt like the 67)

not sure what/where or if anything happened with that.

Quoting lucky777 (Reply 24):
Indeed...i would have to assume Delta and AA and UA (along with Southwest, jetBlue etc....) have looked at the exact same numbers with regards to aircraft and come to vastly different outcomes. Delta operates more like an upstart that scours the globe for used aircraft that the majors no longer have a need for wherease AA and UA have been ordering new aircraft by the boatload.

This isn't completely true.
You aren't going to see Delta getting a bunch of 757s or M80s. They are going after comparable aircraft. Again, fuel burn M90 v 320 is very comparable. That plus the low ownership cost(because Delta is basically the only carrier who wants them.) makes the favorable to Delta. Also these airplanes will be able to fly for 10-15 maybe even 20 years. Delta wants all of its airplanes to fly for 25 to 30 years and they want to own them. I'm not sure about UA but the large majority of AA's fleet is going to end up being leased. All the 320 ceo, 787s and the bulk of the 737NG fleet are or will be leased. (airbus on the 320s, GE on the 787s) So with that AA could be planning to keep a more fresh fleet.

I am not in the camp that Delta is going to start buying 737NGs that only have 5 years of life left in them. At some point I think you will see Delta' order book start to be comparable to that of UAs.
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LAXintl
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 2:45 am

Quoting Deltal1011man (Reply 35):
I would bet RR and GE can do power by the hour without Beoing.

I am pretty certain not, or atleast it was not possible in 2011.

Restriction was part of joining GoldCare, with parties being precluded from competing against the Boeing offering by cutting their own deals. Same goes with a host of other vendors like avionics (Honeywell), and down to all the nuts and bolts providers even.

Basically selling point for vendors was choice to join GoldCare and be exclusive with Boeing with guaranteed flow of business and preset rates, or do their own thing and take the risk of market forces.
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cschleic
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 4:54 am

Quoting Roseflyer (Reply 18):
If Boeing was smart and acted completely as an independent company interested in maximizing profit, the total lifecycle costs for the 737-900ER would be the same as the 737 MAX-9. That means for all the dollars that were saved with the MAX's operating efficiency improvements, the purchase price would be equivalently raised. That doesn't actually happen in real life with imperfect competition, but on paper, it makes economic sense.

Economic theory and business reality rarely are the same thing. Reality is so much more complicated. For example, Allegiant adding plane types. They have a lot of very interesting presentation slides showing total costs of MD's vs. the Airbus, how the 757's can be used to Hawaii, etc. But the reality of jumping into ETOPS, mechanical issues, etc., aren't easily quantified, especially without experience, and reality catches up with numbers on paper.

Quoting EPA001 (Reply 28):
Regarding the B737-MAX, or the A320-NEO, Delta wants to wait and see (or hear) about the real data when the aircraft are in service at the airlines who ordered them first. If these numbers add up, they probably will order either the B737-MAX, or the A320-NEO, or both

Or wait 15 years and get a lot of them used.  
Quoting ghifty (Reply 23):
Cuts CAPEX (is this the right term?) immensely.

Yes, that's the right term. And since RA referred to capital cost, sounds like buying vs. operating leases.
 
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PM
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 8:24 am

Quoting rising (Thread starter):
We operate 33 A330s

Who's going to tell him it's 32?  
Quoting 1337Delta764 (Reply 3):
I expect DL will likely place a separate order for the 789 with GEnx engines

Surely there's a typo here? You don't mean 'expect', you mean 'hope'.
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 10:44 am

With Delta's recent buying pattern, will they be buying secondhand 737NGs and A320s as other operators replace theirs?

Might be a good interim buy to tie them over until the all new narrowbodies are finally launched.
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bobnwa
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 11:36 am

Quoting Deltal1011man (Reply 11):
Again, for the last time, as long as Delta fixes it, I couldn't honestly give two s...craps what they fly or who makes it. Do you understand now. I can't possibly type it any slower.

Didn't you at one time make the statement that you would never fly on an airbus product or work for an airline that flew them. I also believe you made the statement that you would never fly on an airline that had RA as CEO. Have you changed your mind about those two statements?
 
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 12:12 pm

Quoting AirbusA6 (Reply 39):
With Delta's recent buying pattern, will they be buying secondhand 737NGs and A320s as other operators replace theirs?

The problem is that unless they get, say, the ex-FR frames at 8 years old (which will have 15 years left in them) then they don't make them like they used too   
Worked Hard, Flew Right
 
Flighty
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Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 12:40 pm

Quoting ghifty (Reply 17):
The 787 really is "sooo much cheaper to operate." That's not debatable. Nor is the fact that ordering new-build 787s has a greater financial burden than continuing to operate already-owned 767s. RA, and Delta in general, is looking at the bigger picture.

Sigh. Operating costs traditionally include the cost of your equipment. So, like you say. The 787 is expensive. A Dreamliner fleet may be more expensive to deploy than 767s. It's as simple as that.
 
frigatebird
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RE: Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 2:30 pm

Quoting rising (Thread starter):
He added that should Boeing hope that its stretched 787 will take sales from the A330, "its prices have to come way down."

Ah, negotiations on NW's 787 order have restarted again     Probably these will include the 787-9 and -10s for expansion   

Quoting Deltal1011man (Reply 35):
Over time the the 767-300ERs will have to be replaced mostly by 787-8s. As the 767 fleet ages the 18 787-8 orders can start to come in and replace them. Also the 787-9 will be the perfect replacement for the 764s and 332s when that day comes.
I imagine the 777-8/9 and or 787-10 will replace the 777-200s and 333s.

I guess the 777s and A330s will stay till the end of their useful life, which by DL standards, should be quite while. It will be a very interesting battle to see what will replace DL's 744s. They should be able to last until 2020, so the 777-9X should have a decent chance. But it's gonna be a tough battle with the A350-1000 though
  

Quoting Deltal1011man (Reply 35):
Delta is basically out of 12+ hour capacity. 777/744 fleet is maxed out, and they may be able to get one more longer haul route out of the 332 fleet

So, when DL wants to expand their long-haul routes before 2020 (and I'd be surprised if they won't), it will probably look at some used A330s. With 787 deliveries now speeding up, we should see some A330s appearing on the used market...

[Edited 2013-05-23 07:45:05]
146,318/19/20/21,AB6,332,343,345,388,722,732/3/4/5/G/8,9,742,74E,744,752,762,763,772,77E,773,77W,AT4/7,ATP,CRK,E90,F50/7
 
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RE: Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 7:10 pm

Quoting lucky777 (Reply 24):

Indeed...i would have to assume Delta and AA and UA (along with Southwest, jetBlue etc....) have looked at the exact same numbers with regards to aircraft and come to vastly different outcomes. Delta operates more like an upstart that scours the globe for used aircraft that the majors no longer have a need for wherease AA and UA have been ordering new aircraft by the boatload.

Delta' s strategy is in between UA/AA and Southwest. Southwest buys new and holds onto aircraft till they are done. I think they own most of their airplanes like NW. Delta buys used and holds.

Quoting Deltal1011man (Reply 35):
I am not in the camp that Delta is going to start buying 737NGs that only have 5 years of life left in them. At some point I think you will see Delta' order book start to be comparable to that of UAs.

See above it might approach Southwest's but I don' think it will reach it. Per the discussions on this thread, I think Delta will be flying 737-900's and 320's and 330's for a long time. 777's I am not so sure about, unless they buy EK's old frames and EK will have plenty.
 
bigjku
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RE: Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 7:58 pm

What is kind of interesting to me is the possibility that Delta hordes cash through these kind of things and then might be willing to place a large order to get to the front of the line for whatever follows the 737/A320. If they can tempt B or A to pursue that kind of project they could get the drop on everyone else who would just be putting their newly financed into full service. Delta will have a low debt level and plenty of cash where they could basically cut short the life of the new narrowbodies in the US I would think, again assuming someone has something compelling to sell them.
 
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RE: Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 8:27 pm

Quoting AeroWesty (Reply 1):
Quoting rising (Thread starter):
"But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."

That surprises me. In nearly every other industry, total cost of operation is pretty much standard. In the industry I'm in, which is capital intensive to break into, the tax treatment of various purchasing options for the customer is always a part of the sales presentation.

I wasn't sure what this really meant. It is true that the manufacturers show cost comparisons that make their airplane look the best. It is also true that if an airplane saves 5% on operating costs and Boeing wants 3% of it in their pocket in the form of higher purchase price. It's Delta's job to do their own analysis and factor everything in. His comment is the equivalent of going to a car dealer and saying "will I save money if I buy your car?" So, not sure what he was doing other than justifying letting their fleet get older. That may be the way to go, but it might not. They probably feel like they are eliminating so many gas-guzzling CRJs that they are already massively improving their fuel exposure and need to do little else for the time being. Whether or not they own a refinery every airline has to make a bet on the direction of oil prices. They are betting fuel will not increase by much.
 
aajfksjubklyn
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RE: Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 8:36 pm

With an average fleet age of 17.2 years, the last thing they need to be doing is passing up new airplanes????? AA is a distant 2nd w/ 14.8 years but that is getting better and better every month.
 
Flighty
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RE: Delta:We'll Pass On The 737Max & A320NEO, For Now

Thu May 23, 2013 8:47 pm

Quoting enilria (Reply 46):
His comment is the equivalent of going to a car dealer and saying "will I save money if I buy your car?"

He is chiding the airframe makers for saying that. "Lower seat-mile costs" ad nauseum.

Sometimes a DC-10 has cheaper seat-mile cost, if you only fly 1 flight per year. Then, a 787 would have _higher_ seat-mile costs, including ownership... maybe 50 times higher than the DC-10.

Even under normal circumstances, in the fluid lease market, all aircraft in a class have about the same operating cost. So I took his comment to mean the sales pitches are a little bit disingenuous. Maybe if they said "variable seat-mile costs," it would be more correct.
 
delta2ual
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RE: Delta:We'll Pass On The 737Max & A320NEO, For Now

Fri May 24, 2013 4:28 am

Quoting aajfksjubklyn (Reply 47):
With an average fleet age of 17.2 years, the last thing they need to be doing is passing up new airplanes?????

To the average flyer, that is irrelevant. As long as the inside is nice, most don't know how old the plane is. I said before, my mom thought she was on a new plane because the interiors had been upgraded-and it was an MD-88.
What's more important is putting butts in seats, making a profit, and paying down debt-all of which DL has been doing quite well.
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