Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
 
User avatar
Polot
Posts: 11072
Joined: Thu Jul 28, 2011 3:01 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 6:59 pm

WIederling wrote:
bbowma77 wrote:
Theres been a lot of talk on another thread about upcoming engine PIPs extending the range for B787-10 to a 14 hour aircraft, would the same apply to the A330neo? I think this new Delta order is bad news for the A350.


What makes you think the XWB engine is unPIPable ?

No one said the XWB is unPIPable. But DL has limited need for an even longer range A350. A 14 hr A330 would be very attractive to DL, as the A330 is a better fit for a larger part of DL’s network than the A350.
 
User avatar
coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 7:03 pm

SteelChair wrote:
sxf24 wrote:
As someone who has worked closely with Delta as a supplier for more than a decade I can tell you that this order change is probably the work of Airbus to fill in significant weaknesses in the A330 production line. I’m sure Delta readily agreed in exchange for lower A330neo price (theirs was already the same as their A330ceo) and more flexibility with future orders. This is almost the same scenario that played put with the NWA 787 order.

Delta is very smart when it comes to fleet decisions. They are brutal in negotiations and play the OEMs against each other, even when they went into the campaign with a decision made. Both Airbus and Boeing have considered no-bidding in the past since the only sure thing with a Delta campaign is that you will reduce your margins and average selling price further. The only way to change that cycle is to ignore Delta a no bid, something neither Airbus nor Boeing have had the courage to do.


So you know how much Delta paid for the 330 ceos's and neo's?

And you know that they have gone into aircraft purchase negotiations with their mind already made up? Pray tell which ones please.

My, it seems that you are privy to a lot of confidential corporate information.......information that is normally covered by non-disclosure clauses in employment contracts.......hmmm..



I never have worked for Delta or any airline, But I have read the US industry's financial reports religiously every quarter for the past 20 years. I have been tracking Delta's fleet commitments every quarter for the past 10 years and based on the changes in the financial commitments, I have been maintaining a detailed excel spreadsheet and can say with a high degree of confidence that Delta paid Airbus between $82 and 92mm (or I could just say $87mm+-5mm) for each of the 10 A330CEO's that were delivered between 2Q 2015 and 2Q 2017. Further analysis of their fleet commitments tells me they have pricing for the 25 A339 that were ordered at the same time as the 25 A359's (during Q4 2014) that results in a per frame pricing of around $91mm+-5mm for the A339 and around $124mm +-5mm for the A359's. I actually have a great deal of confidence that when they ordered those 50 aircraft during Q4 2014 they were only committing to pay right around $215mm+-5mm for each pair of A339/A359 based on the change in the aircraft commitment figure during that quarter. So perhaps my allocation of $91mm+- for the A339 and $124mm +- is not quite right, but if you want to argue that they paid $100mm (i.e. plus 10% than my estimated number) fo each A339, it necessarily means that they are getting their A359's for only $114mm each (to keep the price per pair number at around the $215mm figure)--which I don't see, based on relative demand for the A350 family.

I also study the financial reports of the other US airlines. Delta in the past 10 years has never disclosed an advance deposit line item or footnote on aircraft purchases. American and United generally do with a number of somewhere between 3% and 5% of their respective commitment position. In discussions Delta does admit to making advance payments on aircraft purchases as general text on their usage of cash flow, but I tend to think that Delta's initial purchase deposits are probably under 2% of the purchase price and therefore are not sufficiently material to merit their own separate financial statement line or foot note on Delta's quarterly and annual financial reports. Also keep in mind that Delta has strong financial statements and a purchase contract by Delta to Airbus or Boeing or Bombardier is a pretty darn strong assurance of Delta's commitments. They are not a start up airline located in a more unstable country which would be asked to post larger initial order deposits and larger progress payment deposits.


From analyzing the fleet financial commitment position and the cash flows it is possible to deduce with a great deal of confidence, certainly plus or minus a 5%, variance what Delta has committed to pay for their future aircraft deliveries. The math does not lie. I can also generally tell from the variance between my deduced fleet commitment $ number and the financial statement reported fleet $ commitment number if there was a bit more pre-delivery progress payments made during the preceding quarter, usually signalling a bit heavier delivery schedule the following quarter.

As of September 30, 2018 Delta's 10Q reported a total of $15,520,000 in aircraft purchase commitments. This per my deductions and calculations and a very minor degree of forensic accounting s-w-a-g based on some other articles and studies I have seen over the years, is accounted for by a total of 304 aircraft for which binding purchase agreements were in place on this date, consisting of:

26 B739ER's at about $43mm each, 64 A321(ceo)'s at about $42mm each, 25 A339 at about $91mm each, 14 A359 at about $122mm each, 75 CS 100 (A220-100) at about $27mm each, 100 A321neo at about $55mm each and finally 19 CR9s (Delta ordered 20 of them in June 2018, 1 of which already delivered in Sept 2018 and rest scheduled through 2020 to be operated by Skywest) at about $20mm each. Multiplying these above factors results in my deduced number of around $15.8-15.9billion in aircraft purchase commitments compared to the reported figure of $15.5bn. The difference can be explained by deposits including progress payments made during the quarter ending Sept 30, 2018. Sure I could be off by a bit on the unit purchase prices but I have a great deal of confidence that on average I am not off by more than about 5% plus or minus depending on the aircraft model.

Below are some additional observations but they may help those interested in the history of the beginnings of my excel spreadsheet:

During the years that Delta had the 18 788's on their order books, inherited from NWA, I had deduced they had a commitment cost on Delta's books of about $138mm each, Back in Q4 2010 Delta ONLY had total aircraft financial commitments of about $2.5bn. The only aircraft on their order books at Dec 31, 2010 were the 18 788's, ergo not too hard to deduce that they had a future financial commitment unit value of $138mm each. So lets assume that Northwest had given Boeing initial deposits of $5mm each, and those deposits were then inherited by post merger Delta. That is only $90mm in total deposits which could have resulted in a $143mm purchase price for each 788, But whether the 788 was on Delta's purchase commitment books at $133mm or $138mm or $143mm each, it is IMHO not a significant variance for our purposes from what the actual confidential number actually was. And during the succeeding years when the 788 program went vastly late and overweight on the early delivery units, I don't see Delta ever having been required to pay additional deposits on their 788 orders. Delta I am sure could have contractually cancelled NWA's purchase agreement and gotten all deposits back because of the non-performance by Boeing, so working out things among ''business friends'' and ordering the 739ER was a win-win for Delta and Boeing. Plus Delta by keeping the B788 on their order books for as long as they did was certainly able to get current reports fro Boeing and a better appreciation on the performance of the 788, probably eventually concluding that it was a tad small for the Delta route system that developed after 2010, especially as Delta figured they could control their Capex by keeping their 767-300ER fleet rebuilt, refurbished and running for probably 10 years longer that would have been case if management had decided to take the 788 plunge. Between Q3 2016 and Q4 2016 10Q and 10K reports you can see that Delta's aircraft commitment $ number dropped from $15.4 to 12.4bn which is the quarter when the 788's were officially cancelled. Once could conclude that the unit price of the 788's had gone up but then you have also have to factor in that the commitment position for 739ER and A321 dropped by 4 each during this quarter or another $350mm worth of aircraft deliveries , plus there was some additional fudging of the commitment numbers amounting to about $200mm as the 19 (used ex Air Canada) E190's Delta that committed to buy from Boeing Capital disappeared from the aircraft on order list during that period of time.

Bottom line, IMHO, is that Delta got a killer deal of around $87mm on the 10 ''end of the production line'' A333 (ceos) and an equally killer deal on the 25 (Delta as launch customer) and now increased to 35 A330neos. That is a lot of capacity for a relatively modest capex while keeping the same pilot pool. I will be analyzing the year end 2018 10K when it is reported to the SEC, which if the pattern for the past several years hold true, will take place sometime during the Feb 10-Feb 20 2019 time frame, to try and deduce if these additional 10 A339neos are costing significantly more than the first 25 A339neo ($91mm each +-). I suspect not.
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
JayinKitsap
Posts: 2378
Joined: Sat Nov 26, 2005 9:55 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 7:11 pm

SteelChair wrote:
It seems sometimes that people on this website just make stuff up.


This is painfully obvious in the HA inter island posts RE the 717's should be replaced by A321's as they have so much more capacity.

It doesn't matter that the short flight short turns fry most high bypass engines has been proven routinely. They recommend that the crew step over to the next plane so the one that landed can cool 45 min. That does work but it takes 4 planes to do a route currently done by 2 planes. Not to mention adding tons of preflight checks as the crew changes.

In this case neither the 737 past the -200 nor the 320 series works on this route. But they can do it for sure on Anut.
 
jagraham
Posts: 1153
Joined: Sun Jul 17, 2016 11:10 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 7:15 pm

PRs A359 is the 278t improvement . . 36600 gal is enough for an A359 to get from EWR to MNL, but 140t OEW + 111t fuel is 251t, leaving only 17t for 300 pax - not enough. The 278t variant can have 27t for 300 pax; tight, but doable.
 
User avatar
DL757NYC
Posts: 311
Joined: Wed Nov 02, 2016 6:07 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sat Nov 17, 2018 7:21 pm

NateGreat wrote:
Yes, the 777-200ER will need replacement in the coming years (at least 10 years). But, why is Delta giving the aircraft a major overhaul if “the airline is in such a rush to retire them”? If that were the case, then the A332/A333 should have been the ones to get Delta One Suites, Premium Select, possible new Economy Seats, and LED Mood Lighting. The Boeing 777 fleet has plenty of life left in them.


The 777’s wont need to be replaced for 10 years and if they did they could buy used 777’s
 
lifecomm
Posts: 36
Joined: Wed Mar 15, 2017 12:29 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 7:26 pm

SteelChair wrote:
I just bought a ticket from DL on a 787, and other people here can do the same.

It was operated by VS, and I think the cabin service was better than on DL metal.

Delta owns 787s and A380s. They own 49% of their JV partners 787s and A380s. Haha.


I hadn't thought of this. It seems that DL has access to all the data they need to decide the fate of future 333, 339 & 359 purchases - as opposed to the 788, 789 or 78J. It seems DL knows what they're doing - who knew?!
 
JayinKitsap
Posts: 2378
Joined: Sat Nov 26, 2005 9:55 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 7:46 pm

coronado wrote:
From analyzing the fleet financial commitment position and the cash flows it is possible to deduce with a great deal of confidence, certainly plus or minus a 5%, variance what Delta has committed to pay for their future aircraft deliveries. The math does not lie. I can also generally tell from the variance between my deduced fleet commitment $ number and the financial statement reported fleet $ commitment number if there was a bit more pre-delivery progress payments made during the preceding quarter, usually signalling a bit heavier delivery schedule the following quarter.

As of September 30, 2018 Delta's 10Q reported a total of $15,520,000 in aircraft purchase commitments. This per my deductions and calculations and a very minor degree of forensic accounting s-w-a-g based on some other articles and studies I have seen over the years, is accounted for by a total of 304 aircraft for which binding purchase agreements were in place on this date, consisting of:
...

Bottom line, IMHO, is that Delta got a killer deal of around $87mm on the 10 ''end of the production line'' A333 (ceos) and an equally killer deal on the 25 (Delta as launch customer) and now increased to 35 A330neos. That is a lot of capacity for a relatively modest capex while keeping the same pilot pool. I will be analyzing the year end 2018 10K when it is reported to the SEC, which if the pattern for the past several years hold true, will take place sometime during the Feb 10-Feb 20 2019 time frame, to try and deduce if these additional 10 A339neos are costing significantly more than the first 25 A339neo ($91mm each +-). I suspect not.


Shouldn't the highlighted figure by $15.5 B not million.

Trying to parse out unit costs from aggregate amounts in financials take some assumptions, which you noted. A large airline that is strong financially probably has standing discounts off list that are pretty uniform. Strong sellers like the 789 and 321 probably sell near that standing discount number. Slower sales models or where openings in the line (such as EY is causing with its deferrals and cancellations) can result in sharp discounts for a specific order.

As you mention, if the 330neo prices are higher, it requires the 350 pricing to be lower to fit the total order amount. In this latest order a factor that will need to be considered is if A had both a 'hole' in the 330 backlog and potential delay penalties on the 350 that Delta solved by delaying theirs. Your spreadsheet is similar to the data mining the professional firms do for lenders, lessors, and investors where true values are so important.
 
Favre4
Posts: 21
Joined: Tue Oct 04, 2016 7:44 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 8:13 pm

777Mech wrote:
par13del wrote:
I think the DL 777 fleet is less than 20 a/c, the 767's - all variants is more important from either OEM point of view, as of now, the replacement seems to have been chosen.


You best believe the likes of Atlas, UPS, FedEx and other 767 cargo operators have been banging on DL's door to buy the 767s as they retire.
I think they'll be able to cash out on these frames and then save some money with newer frames.

Also as a side note, DL is paying for all/most of these planes in cash, so in the event of a downturn, they'll have flexibility and they wont have to make payments



Fedex has only New Built 767F
 
smartplane
Posts: 1609
Joined: Fri Aug 03, 2018 9:23 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 8:17 pm

777Mech wrote:
Also as a side note, DL is paying for all/most of these planes in cash, so in the event of a downturn, they'll have flexibility and they wont have to make payments

You are right and wrong, confusing how Delta meet pre-purchase milestones and delivery / settlement payments, versus how they fund the fleet post delivery.

Delta, due to their credit and mass, avoid finance costs associated related to acquiring and taking delivery of each new aircraft and engine. So yes, they do pay cash.

But post-delivery, every new aircraft and engine is financed, and is subject to a fixed and floating charge, used to secure loans to pay cash for other new aircraft and engines. And they sell and lease back.
 
User avatar
coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 8:20 pm

JayinKitsap wrote:
Shouldn't the highlighted figure by $15.5 B not million.

Trying to parse out unit costs from aggregate amounts in financials take some assumptions, which you noted. A large airline that is strong financially probably has standing discounts off list that are pretty uniform. Strong sellers like the 789 and 321 probably sell near that standing discount number. Slower sales models or where openings in the line (such as EY is causing with its deferrals and cancellations) can result in sharp discounts for a specific order.

As you mention, if the 330neo prices are higher, it requires the 350 pricing to be lower to fit the total order amount. In this latest order a factor that will need to be considered is if A had both a 'hole' in the 330 backlog and potential delay penalties on the 350 that Delta solved by delaying theirs. Your spreadsheet is similar to the data mining the professional firms do for lenders, lessors, and investors where true values are so important.


AGREED, The 10Q for Sept 30 is a future aircraft purchase commitments of $15,520,000,000 ($15.5 billion). Thanks for catching this. I may have lost my edit correction time window to my post.

My thought pattern on the follow up 739ER order that was announced by Delta in late 2015, followed within a year by the 788's and the used E190's disappearing off of the commitment list included a couple considerations. 2016 was the year it was disclosed that United was going to be getting 737-700 from Boeing for around $26mm each (subsequently this order was cancelled), ostensibly to 'kill' the CS100 program. The 737-900ER by then had proven not to be a very good seller other than to the usual US airlines (AK, DL and UA). As a stand alone order Delta could probably have squeezed Boeing to supply them the follow on order of 737-900ER for under $40MM each, which is a 50% premium over the 737-700, and lets face $15 million pays for a lot of ''tube'' when everything else is pretty similar. The order probably also has some delivery date flexibility by Boeing, to help Boeing in organizing their production transition from NG to Max. I deduced that Delta probably agreed to pay around $43mm, about the same price as for the original order, for the follow on order for the 739ER's and exacted the additional considerations to consider the 788 order cancelled and off the books, without any lawsuits, and also to formally cancel any remaining issues regarding the aborted used Air Canada E190 deal with Boeing. That time frame is probably when they negotiated the 'put' option, since exercised, which gave Boeing the right to tack on the extra 5 739ER frames to the Delta order.
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
Eyad89
Posts: 664
Joined: Fri Sep 02, 2016 10:47 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 8:25 pm

jagraham wrote:
PRs A359 is the 278t improvement . . 36600 gal is enough for an A359 to get from EWR to MNL, but 140t OEW + 111t fuel is 251t, leaving only 17t for 300 pax - not enough. The 278t variant can have 27t for 300 pax; tight, but doable.


Sorry, PR flies to JFK, not EWR.

Anyways, Your 111t for fuel for JFK to MNL is way too much, even SIN-EWR would tank less (there was a long discussion about this in the technical forum, SQ22 had a TOW of 273t and burned 101t of fuel). While consuming an average of 5.8 t/hr, A359 would need 90t for JFK-MNL, and if we add 5t for reserve fuel, we would have 95t.

Then your 140t for OEW is a couple of tons heavier than what it should. A350's ACAP would suggest an OEW of 138t for the base model WV000. Later models should be lighter, and PR's A359 should have an OEW of 135-137t. Let's use a 137t in this case, so this leaves a possible payload of 278t - 137t - 95t = 46t.


Feel free to correct me anywhere.
 
jbs2886
Posts: 2569
Joined: Wed Apr 01, 2015 9:07 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 8:48 pm

coronado wrote:
JayinKitsap wrote:
Shouldn't the highlighted figure by $15.5 B not million.

Trying to parse out unit costs from aggregate amounts in financials take some assumptions, which you noted. A large airline that is strong financially probably has standing discounts off list that are pretty uniform. Strong sellers like the 789 and 321 probably sell near that standing discount number. Slower sales models or where openings in the line (such as EY is causing with its deferrals and cancellations) can result in sharp discounts for a specific order.

As you mention, if the 330neo prices are higher, it requires the 350 pricing to be lower to fit the total order amount. In this latest order a factor that will need to be considered is if A had both a 'hole' in the 330 backlog and potential delay penalties on the 350 that Delta solved by delaying theirs. Your spreadsheet is similar to the data mining the professional firms do for lenders, lessors, and investors where true values are so important.


AGREED, The 10Q for Sept 30 is a future aircraft purchase commitments of $15,520,000,000 ($15.5 billion). Thanks for catching this. I may have lost my edit correction time window to my post.

My thought pattern on the follow up 739ER order that was announced by Delta in late 2015, followed within a year by the 788's and the used E190's disappearing off of the commitment list included a couple considerations. 2016 was the year it was disclosed that United was going to be getting 737-700 from Boeing for around $26mm each (subsequently this order was cancelled), ostensibly to 'kill' the CS100 program. The 737-900ER by then had proven not to be a very good seller other than to the usual US airlines (AK, DL and UA). As a stand alone order Delta could probably have squeezed Boeing to supply them the follow on order of 737-900ER for under $40MM each, which is a 50% premium over the 737-700, and lets face $15 million pays for a lot of ''tube'' when everything else is pretty similar. The order probably also has some delivery date flexibility by Boeing, to help Boeing in organizing their production transition from NG to Max. I deduced that Delta probably agreed to pay around $43mm, about the same price as for the original order, for the follow on order for the 739ER's and exacted the additional considerations to consider the 788 order cancelled and off the books, without any lawsuits, and also to formally cancel any remaining issues regarding the aborted used Air Canada E190 deal with Boeing. That time frame is probably when they negotiated the 'put' option, since exercised, which gave Boeing the right to tack on the extra 5 739ER frames to the Delta order.


1) pretty sure DL actually sold the E190s (meaning they didn’t cancel the Boeing purchase), and
2) it was 10 put orders for 739ERs.
 
User avatar
Revelation
Posts: 25011
Joined: Wed Feb 09, 2005 9:37 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 8:53 pm

coronado wrote:
Bottom line, IMHO, is that Delta got a killer deal of around $87mm on the 10 ''end of the production line'' A333 (ceos) and an equally killer deal on the 25 (Delta as launch customer) and now increased to 35 A330neos. That is a lot of capacity for a relatively modest capex while keeping the same pilot pool. I will be analyzing the year end 2018 10K when it is reported to the SEC, which if the pattern for the past several years hold true, will take place sometime during the Feb 10-Feb 20 2019 time frame, to try and deduce if these additional 10 A339neos are costing significantly more than the first 25 A339neo ($91mm each +-). I suspect not.

Thank you for the hugely informative post.

As mentioned earlier, while DL is getting a great pricing, we can be sure the airframe vendors find a way to extract better prices out of other customers with less buying power.

As you say, DL is helping Airbus secure the orders needed to wind down the CEO and ramp up the NEO, and there's a lot of value to those orders.

Future customers probably won't be able to benefit the same way DL has.

It's also a great comment about not having to transition so many pilots, crews and maintainers to A350 is also saving money for DL.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
User avatar
coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 9:58 pm

smartplane wrote:
777Mech wrote:
Also as a side note, DL is paying for all/most of these planes in cash, so in the event of a downturn, they'll have flexibility and they wont have to make payments

You are right and wrong, confusing how Delta meet pre-purchase milestones and delivery / settlement payments, versus how they fund the fleet post delivery.

Delta, due to their credit and mass, avoid finance costs associated related to acquiring and taking delivery of each new aircraft and engine. So yes, they do pay cash.

But post-delivery, every new aircraft and engine is financed, and is subject to a fixed and floating charge, used to secure loans to pay cash for other new aircraft and engines. And they sell and lease back.


Agreed, but I think you will also agree that the percentage of LT debt and Lease Obligations that Delta is taking on seems to be an increasingly smaller percentage in relation to the asset value of the new aircraft they are taking delivery of, as they seem to consistently dedicate $4-$5bn a year to capex so even if $1 or $1.5 billion of this is for support equipment and airport construction projects, the remaining $3.5bn when applied to aircraft purchases covers a lot of their cost.

I just did a quick and dirty review of the 2018 Sept 30 10Q so I will not expect the overall magnitude of what I am saying will change that much when the 2018 year end figures are published.. Total operational cash flow for the 9 months was $5.7bn, of which $1.9 was returned to shareholders. So that left $3.8bn available for capex.

The actual aircraft deliveries during the first 9 months of 2018 were IIRC and using my deduced commitment cost figures: 15 x B739 x $43mm each=$645mm, 29 x A321 x $42mm each, 5 x A359 x $122mm each and 1 x CR9 at $20mm, for a total of $2.5billion+-5% on new aircraft capex. (BTW Delta's 3Q 2018 10Q projects a further $640mm spending in new aircraft deliveries during Q4 2018 which i think will be made up of around 6 to 8 each B739ER and A321 plus the perhaps 3 A220-100 deliveries this quarter-as I don't think there will be any further A359 deliveries until 2019.) This leaves $1.3bn of the capex allocation for the first 9 months of 2018 available for other projects. These other projects including terminals, existing fleet modernization projects and ancillary airline equipment, IT, etc . We know that Delta entered into special financing arrangements in 2018 to fund the LAX and LGA terminal projects (see pages 35 and 36 of the Sept 30 2018 10Q available on the Delta investors relation SEC documents link for supporting information to the above. Bottom line is I don't think Delta had to take on much if any new debt or lease obligations to cover aircraft deliveries so far this year. But sometimes strategically is is good to do a few aircraft financial transactions each quarter, and maintain the active ties with the lessors or banks, even if you don't need to, because you never know when a black swan event might occur. I am sure earlier this year especially when oil prices were shooting up which could have impacted cash flow that Delta was lining up back up financing facilities.

Another issue I have been looking forward to analyzing next year: The new FASB accounting standards -- airlines will have to include the actual asset and liability balances of operating leases (as they currently do with capital leases) within the balance sheet. See page 7 of the following link for the impact on United Continental, Delta and American as well as Southwest: https://explore.leaseaccelerator.com/wp-content/uploads/2016/01/Who-is-Most-Impacted-by-the-New-Lease-Accounting-Standards-d.pdf

As you can see on page 7 this table (albeit based on 2015 financial information), the US4 will be moving a lot of stuff onto their balance sheets. IIRC the year end 2018 annual reports for large companies will have to start disclosing the side by side balance sheet comparisons of the current off balance sheet treatment of operating leases and the new treatment, which I believe becomes effective and replaces the current standards effective at year end 2019. Delta discusses some of the considerations of these new accounting rules on page 6 of their Sept 30, 2018 10Q but without any estimates yet.

I do note that In Delta's case they currently (as of 9/30/2018) have 151 aircraft (out of a mainline fleet of 872 aircraft) on operating leases and of these basically almost half are the Airtran/Southwest 717 fleet leased from (mostly) Boeing,
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
User avatar
coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 10:43 pm

jbs2886 wrote:

1) pretty sure DL actually sold the E190s (meaning they didn’t cancel the Boeing purchase), and
2) it was 10 put orders for 739ERs.



Thanks for the corrections. The impact of item 1) I think was pretty minor, I could only detect about a $200million impact to the total aircraft purchase commitment figures during that period from one quarter to the next from the E190 transactions which suggests about $10mm per E190, but overall this has been within the + and - variance I have seeing over the years and did not materially change the numbers. But I do now recall that the discussion was that Delta in fact took title to them and then resold them. Do you recall who bought them from Delta?

And you are right: Boeing did exercise 10 put options in 2017 as disclosed in one of the addendums to Deltas 1Q 2017 10-Q filed April 12, 2017. This will bring the eventual fleet of the 737-900ER to 130 (only 26 more to go as of 9/30/2018!) . Thanks for correcting me. I guess I am becoming an old fart: I still remember a flight on a REAL Aerovias Lockheed L-1049 Super Constellation in 1958 but things get more jumbled in the old brain with the passing of the years, so this is lesson that I should not always trust my 'memory' but should check the source material!
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
User avatar
coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sat Nov 17, 2018 11:51 pm

I had fun going back and reviewing the Delta 10K for the year ending 12/31/2010 which was filed on Feb 16, 2011. It stated in one of the notes:
Quote: NOTE 7. PURCHASE COMMITMENTS AND CONTINGENCIES
Aircraft Purchase Commitments
Future aircraft purchase commitments at December 31, 2010 are estimated to total approximately $2.6 billion. The following table shows the
timing of these commitments:
Years ending December 31 (in millions)
2011 $60
2020-2022 $2,500
Total $2,560

Our aircraft purchase commitments at December 31, 2010 relate to 18 B-787-8 aircraft and 12 previously owned MD-90 aircraft. During
2010, we entered into an agreement with The Boeing Company to reaffirm our previous orders for 18 B-787-8 aircraft and to defer delivery of
those aircraft from 2008-2010 to 2020-2022. Our aircraft purchase commitments do not include orders for five A319-100 aircraft and two A320-
200 aircraft because we have the right to cancel these orders.
End of Quote

So that makes it pretty easy to deduce that Delta was contractually financially obligated at year end 2010 to buy 12 MD90's in 2011 for a total of $60mm ($5 million per copy!!! not a bad deal even if by 2018 they had to start parking some of them due to the engine refurbishment cost issues) and the 18 788's for $2.5bn ie 138.8mm per aircraft.

Simpler days. Also the last 10 years have been pretty low inflation years so price adjustments on future delivery commitments have probably only been in the 1% per year range or less, since most aircraft purchase contracts will reference one of the recognized government price change indices to adjust from contract price to actual delivery price, So by the time that Delta and Boeing agreed to officially cancel the 788 order during the final quarter of 2016, I doubt if the commitment amount for the 788's was on Delta's books for much more than $2.6bn ($144mm per aircraft) compared to the $2.5bn amount disclosed at year end 2010. Again not really materially significant in the scheme of things.

Also I found a footnote on the 2010 year end 10K which I had forgotten, disclosing that Delta's total advance deposits on equipment purchases at 12/31/2010 was $48million. So even if the entire deposit amount was a carry over from NWA's initial purchase deposits, and 100% of this applied to the 788 order, that is only about $2.6mm in purchase deposits per 788 aircraft! i.e. a deposit percentage of under 2 % of the committed purchase price! And that would have been after Delta and Boeing had agreed (as of Dec 31, 2010) to push out deliveries of the 788's to the 2020-2022 time frame.
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
User avatar
coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 12:24 am

Additional thoughts: . But it could be the case that some of this $48mm in deposits on equipment purchases, actually included some amounts as advance payments effected to the Japanese airlines as prepaid progress payments toward the delivery of the used 12 MD 90's! So maybe the MD90's cost Delta $9mm each with $4mm of each ($4mm x 12=$48mm) deposited prior to Dec 31/2010, which would mean zero deposits on the 788's. My point with all of these numbers is that they are within the variances I consider reasonable and do not materially change my deduced unit purchase prices.
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
Justapax
Posts: 73
Joined: Sat Dec 31, 2016 6:31 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 12:56 am

coronado wrote:
I guess I am becoming an old fart: I still remember a flight on a REAL Aerovias Lockheed L-1049 Super Constellation in 1958 but things get more jumbled in the old brain with the passing of the years, so this is lesson that I should not always trust my 'memory' but should check the source material!
[/quote]

I just wanted to add that for someone who remembers a flight from 60 years ago...you're doing great!!!
 
airzona11
Posts: 1800
Joined: Wed Dec 17, 2014 5:44 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 1:33 am

coronado wrote:
SteelChair wrote:
sxf24 wrote:
As someone who has worked closely with Delta as a supplier for more than a decade I can tell you that this order change is probably the work of Airbus to fill in significant weaknesses in the A330 production line. I’m sure Delta readily agreed in exchange for lower A330neo price (theirs was already the same as their A330ceo) and more flexibility with future orders. This is almost the same scenario that played put with the NWA 787 order.

Delta is very smart when it comes to fleet decisions. They are brutal in negotiations and play the OEMs against each other, even when they went into the campaign with a decision made. Both Airbus and Boeing have considered no-bidding in the past since the only sure thing with a Delta campaign is that you will reduce your margins and average selling price further. The only way to change that cycle is to ignore Delta a no bid, something neither Airbus nor Boeing have had the courage to do.


So you know how much Delta paid for the 330 ceos's and neo's?

And you know that they have gone into aircraft purchase negotiations with their mind already made up? Pray tell which ones please.

My, it seems that you are privy to a lot of confidential corporate information.......information that is normally covered by non-disclosure clauses in employment contracts.......hmmm..



I never have worked for Delta or any airline, But I have read the US industry's financial reports religiously every quarter for the past 20 years. I have been tracking Delta's fleet commitments every quarter for the past 10 years and based on the changes in the financial commitments, I have been maintaining a detailed excel spreadsheet and can say with a high degree of confidence that Delta paid Airbus between $82 and 92mm (or I could just say $87mm+-5mm) for each of the 10 A330CEO's that were delivered between 2Q 2015 and 2Q 2017. Further analysis of their fleet commitments tells me they have pricing for the 25 A339 that were ordered at the same time as the 25 A359's (during Q4 2014) that results in a per frame pricing of around $91mm+-5mm for the A339 and around $124mm +-5mm for the A359's. I actually have a great deal of confidence that when they ordered those 50 aircraft during Q4 2014 they were only committing to pay right around $215mm+-5mm for each pair of A339/A359 based on the change in the aircraft commitment figure during that quarter. So perhaps my allocation of $91mm+- for the A339 and $124mm +- is not quite right, but if you want to argue that they paid $100mm (i.e. plus 10% than my estimated number) fo each A339, it necessarily means that they are getting their A359's for only $114mm each (to keep the price per pair number at around the $215mm figure)--which I don't see, based on relative demand for the A350 family.

I also study the financial reports of the other US airlines. Delta in the past 10 years has never disclosed an advance deposit line item or footnote on aircraft purchases. American and United generally do with a number of somewhere between 3% and 5% of their respective commitment position. In discussions Delta does admit to making advance payments on aircraft purchases as general text on their usage of cash flow, but I tend to think that Delta's initial purchase deposits are probably under 2% of the purchase price and therefore are not sufficiently material to merit their own separate financial statement line or foot note on Delta's quarterly and annual financial reports. Also keep in mind that Delta has strong financial statements and a purchase contract by Delta to Airbus or Boeing or Bombardier is a pretty darn strong assurance of Delta's commitments. They are not a start up airline located in a more unstable country which would be asked to post larger initial order deposits and larger progress payment deposits.


From analyzing the fleet financial commitment position and the cash flows it is possible to deduce with a great deal of confidence, certainly plus or minus a 5%, variance what Delta has committed to pay for their future aircraft deliveries. The math does not lie. I can also generally tell from the variance between my deduced fleet commitment $ number and the financial statement reported fleet $ commitment number if there was a bit more pre-delivery progress payments made during the preceding quarter, usually signalling a bit heavier delivery schedule the following quarter.

As of September 30, 2018 Delta's 10Q reported a total of $15,520,000 in aircraft purchase commitments. This per my deductions and calculations and a very minor degree of forensic accounting s-w-a-g based on some other articles and studies I have seen over the years, is accounted for by a total of 304 aircraft for which binding purchase agreements were in place on this date, consisting of:

26 B739ER's at about $43mm each, 64 A321(ceo)'s at about $42mm each, 25 A339 at about $91mm each, 14 A359 at about $122mm each, 75 CS 100 (A220-100) at about $27mm each, 100 A321neo at about $55mm each and finally 19 CR9s (Delta ordered 20 of them in June 2018, 1 of which already delivered in Sept 2018 and rest scheduled through 2020 to be operated by Skywest) at about $20mm each. Multiplying these above factors results in my deduced number of around $15.8-15.9billion in aircraft purchase commitments compared to the reported figure of $15.5bn. The difference can be explained by deposits including progress payments made during the quarter ending Sept 30, 2018. Sure I could be off by a bit on the unit purchase prices but I have a great deal of confidence that on average I am not off by more than about 5% plus or minus depending on the aircraft model.

Below are some additional observations but they may help those interested in the history of the beginnings of my excel spreadsheet:

During the years that Delta had the 18 788's on their order books, inherited from NWA, I had deduced they had a commitment cost on Delta's books of about $138mm each, Back in Q4 2010 Delta ONLY had total aircraft financial commitments of about $2.5bn. The only aircraft on their order books at Dec 31, 2010 were the 18 788's, ergo not too hard to deduce that they had a future financial commitment unit value of $138mm each. So lets assume that Northwest had given Boeing initial deposits of $5mm each, and those deposits were then inherited by post merger Delta. That is only $90mm in total deposits which could have resulted in a $143mm purchase price for each 788, But whether the 788 was on Delta's purchase commitment books at $133mm or $138mm or $143mm each, it is IMHO not a significant variance for our purposes from what the actual confidential number actually was. And during the succeeding years when the 788 program went vastly late and overweight on the early delivery units, I don't see Delta ever having been required to pay additional deposits on their 788 orders. Delta I am sure could have contractually cancelled NWA's purchase agreement and gotten all deposits back because of the non-performance by Boeing, so working out things among ''business friends'' and ordering the 739ER was a win-win for Delta and Boeing. Plus Delta by keeping the B788 on their order books for as long as they did was certainly able to get current reports fro Boeing and a better appreciation on the performance of the 788, probably eventually concluding that it was a tad small for the Delta route system that developed after 2010, especially as Delta figured they could control their Capex by keeping their 767-300ER fleet rebuilt, refurbished and running for probably 10 years longer that would have been case if management had decided to take the 788 plunge. Between Q3 2016 and Q4 2016 10Q and 10K reports you can see that Delta's aircraft commitment $ number dropped from $15.4 to 12.4bn which is the quarter when the 788's were officially cancelled. Once could conclude that the unit price of the 788's had gone up but then you have also have to factor in that the commitment position for 739ER and A321 dropped by 4 each during this quarter or another $350mm worth of aircraft deliveries , plus there was some additional fudging of the commitment numbers amounting to about $200mm as the 19 (used ex Air Canada) E190's Delta that committed to buy from Boeing Capital disappeared from the aircraft on order list during that period of time.

Bottom line, IMHO, is that Delta got a killer deal of around $87mm on the 10 ''end of the production line'' A333 (ceos) and an equally killer deal on the 25 (Delta as launch customer) and now increased to 35 A330neos. That is a lot of capacity for a relatively modest capex while keeping the same pilot pool. I will be analyzing the year end 2018 10K when it is reported to the SEC, which if the pattern for the past several years hold true, will take place sometime during the Feb 10-Feb 20 2019 time frame, to try and deduce if these additional 10 A339neos are costing significantly more than the first 25 A339neo ($91mm each +-). I suspect not.


What an incredibly informative post. Thank you for sharing.
 
questions
Posts: 2337
Joined: Thu Sep 15, 2011 4:51 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 3:38 am

coronado wrote:
I never have worked for Delta or any airline, But I have read the US industry's financial reports religiously every quarter for the past 20 years. I have been tracking Delta's fleet commitments every quarter for the past 10 years and based on the changes in the financial commitments, I have been maintaining a detailed excel spreadsheet...


Dang! What an impressive hobby! Thanks for sharing your insights with us.
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 3:56 am

coronado wrote:
SteelChair wrote:
sxf24 wrote:
As someone who has worked closely with Delta as a supplier for more than a decade I can tell you that this order change is probably the work of Airbus to fill in significant weaknesses in the A330 production line. I’m sure Delta readily agreed in exchange for lower A330neo price (theirs was already the same as their A330ceo) and more flexibility with future orders. This is almost the same scenario that played put with the NWA 787 order.

Delta is very smart when it comes to fleet decisions. They are brutal in negotiations and play the OEMs against each other, even when they went into the campaign with a decision made. Both Airbus and Boeing have considered no-bidding in the past since the only sure thing with a Delta campaign is that you will reduce your margins and average selling price further. The only way to change that cycle is to ignore Delta a no bid, something neither Airbus nor Boeing have had the courage to do.


So you know how much Delta paid for the 330 ceos's and neo's?

And you know that they have gone into aircraft purchase negotiations with their mind already made up? Pray tell which ones please.

My, it seems that you are privy to a lot of confidential corporate information.......information that is normally covered by non-disclosure clauses in employment contracts.......hmmm..



I never have worked for Delta or any airline, But I have read the US industry's financial reports religiously every quarter for the past 20 years. I have been tracking Delta's fleet commitments every quarter for the past 10 years and based on the changes in the financial commitments, I have been maintaining a detailed excel spreadsheet and can say with a high degree of confidence that Delta paid Airbus between $82 and 92mm (or I could just say $87mm+-5mm) for each of the 10 A330CEO's that were delivered between 2Q 2015 and 2Q 2017. Further analysis of their fleet commitments tells me they have pricing for the 25 A339 that were ordered at the same time as the 25 A359's (during Q4 2014) that results in a per frame pricing of around $91mm+-5mm for the A339 and around $124mm +-5mm for the A359's. I actually have a great deal of confidence that when they ordered those 50 aircraft during Q4 2014 they were only committing to pay right around $215mm+-5mm for each pair of A339/A359 based on the change in the aircraft commitment figure during that quarter. So perhaps my allocation of $91mm+- for the A339 and $124mm +- is not quite right, but if you want to argue that they paid $100mm (i.e. plus 10% than my estimated number) fo each A339, it necessarily means that they are getting their A359's for only $114mm each (to keep the price per pair number at around the $215mm figure)--which I don't see, based on relative demand for the A350 family.

I also study the financial reports of the other US airlines. Delta in the past 10 years has never disclosed an advance deposit line item or footnote on aircraft purchases. American and United generally do with a number of somewhere between 3% and 5% of their respective commitment position. In discussions Delta does admit to making advance payments on aircraft purchases as general text on their usage of cash flow, but I tend to think that Delta's initial purchase deposits are probably under 2% of the purchase price and therefore are not sufficiently material to merit their own separate financial statement line or foot note on Delta's quarterly and annual financial reports. Also keep in mind that Delta has strong financial statements and a purchase contract by Delta to Airbus or Boeing or Bombardier is a pretty darn strong assurance of Delta's commitments. They are not a start up airline located in a more unstable country which would be asked to post larger initial order deposits and larger progress payment deposits.


From analyzing the fleet financial commitment position and the cash flows it is possible to deduce with a great deal of confidence, certainly plus or minus a 5%, variance what Delta has committed to pay for their future aircraft deliveries. The math does not lie. I can also generally tell from the variance between my deduced fleet commitment $ number and the financial statement reported fleet $ commitment number if there was a bit more pre-delivery progress payments made during the preceding quarter, usually signalling a bit heavier delivery schedule the following quarter.

As of September 30, 2018 Delta's 10Q reported a total of $15,520,000 in aircraft purchase commitments. This per my deductions and calculations and a very minor degree of forensic accounting s-w-a-g based on some other articles and studies I have seen over the years, is accounted for by a total of 304 aircraft for which binding purchase agreements were in place on this date, consisting of:

26 B739ER's at about $43mm each, 64 A321(ceo)'s at about $42mm each, 25 A339 at about $91mm each, 14 A359 at about $122mm each, 75 CS 100 (A220-100) at about $27mm each, 100 A321neo at about $55mm each and finally 19 CR9s (Delta ordered 20 of them in June 2018, 1 of which already delivered in Sept 2018 and rest scheduled through 2020 to be operated by Skywest) at about $20mm each. Multiplying these above factors results in my deduced number of around $15.8-15.9billion in aircraft purchase commitments compared to the reported figure of $15.5bn. The difference can be explained by deposits including progress payments made during the quarter ending Sept 30, 2018. Sure I could be off by a bit on the unit purchase prices but I have a great deal of confidence that on average I am not off by more than about 5% plus or minus depending on the aircraft model.

Below are some additional observations but they may help those interested in the history of the beginnings of my excel spreadsheet:

During the years that Delta had the 18 788's on their order books, inherited from NWA, I had deduced they had a commitment cost on Delta's books of about $138mm each, Back in Q4 2010 Delta ONLY had total aircraft financial commitments of about $2.5bn. The only aircraft on their order books at Dec 31, 2010 were the 18 788's, ergo not too hard to deduce that they had a future financial commitment unit value of $138mm each. So lets assume that Northwest had given Boeing initial deposits of $5mm each, and those deposits were then inherited by post merger Delta. That is only $90mm in total deposits which could have resulted in a $143mm purchase price for each 788, But whether the 788 was on Delta's purchase commitment books at $133mm or $138mm or $143mm each, it is IMHO not a significant variance for our purposes from what the actual confidential number actually was. And during the succeeding years when the 788 program went vastly late and overweight on the early delivery units, I don't see Delta ever having been required to pay additional deposits on their 788 orders. Delta I am sure could have contractually cancelled NWA's purchase agreement and gotten all deposits back because of the non-performance by Boeing, so working out things among ''business friends'' and ordering the 739ER was a win-win for Delta and Boeing. Plus Delta by keeping the B788 on their order books for as long as they did was certainly able to get current reports fro Boeing and a better appreciation on the performance of the 788, probably eventually concluding that it was a tad small for the Delta route system that developed after 2010, especially as Delta figured they could control their Capex by keeping their 767-300ER fleet rebuilt, refurbished and running for probably 10 years longer that would have been case if management had decided to take the 788 plunge. Between Q3 2016 and Q4 2016 10Q and 10K reports you can see that Delta's aircraft commitment $ number dropped from $15.4 to 12.4bn which is the quarter when the 788's were officially cancelled. Once could conclude that the unit price of the 788's had gone up but then you have also have to factor in that the commitment position for 739ER and A321 dropped by 4 each during this quarter or another $350mm worth of aircraft deliveries , plus there was some additional fudging of the commitment numbers amounting to about $200mm as the 19 (used ex Air Canada) E190's Delta that committed to buy from Boeing Capital disappeared from the aircraft on order list during that period of time.

Bottom line, IMHO, is that Delta got a killer deal of around $87mm on the 10 ''end of the production line'' A333 (ceos) and an equally killer deal on the 25 (Delta as launch customer) and now increased to 35 A330neos. That is a lot of capacity for a relatively modest capex while keeping the same pilot pool. I will be analyzing the year end 2018 10K when it is reported to the SEC, which if the pattern for the past several years hold true, will take place sometime during the Feb 10-Feb 20 2019 time frame, to try and deduce if these additional 10 A339neos are costing significantly more than the first 25 A339neo ($91mm each +-). I suspect not.


That was an exciting post to read. Thanks Coronado.

Sometimes I try to gauge route or hub profitability based on capacity strengthening or weakening and aggregate, public financials (using what internal industry data I have seen as a model). But I am lazy and nobody will agree how to disaggregate these numbers correctly. You did impressive work on another hugely important question, what does a top tier carrier like Delta really pay for airplanes. The answer is, they wait for an absolutely screaming deal. The A339 and A220 pricing leaps off the page. Delta is such a strong business that they can hold all OEMs to the fire.
Last edited by Flighty on Sun Nov 18, 2018 3:59 am, edited 1 time in total.
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 3:58 am

Coronado - well done. Very impressive.

Having said that, I have a great deal of confidence that todays corporations involve themselves in all sorts of accounting shenanigans (they're part of the swamp after all). Which is not to say that you haven't made a lot of well educated guesses based upon your research, and are probably close in many of your conclusions.

There are all sorts of ancillary considerations however. For example, both the A350 and A339neo have RR engines. Delta entered into a long term agreement with RR. Engines are 30-40% of the price of an airplane. What affect does the RR agreement have upon the "deal" that the airline got? I would suggest that they themselves don't even know for sure, and won't know for a number of years as the deal plays out. Who could have forseen the RR problems they are currently experiencing?
 
TTailedTiger
Posts: 2757
Joined: Sun Aug 26, 2018 5:19 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 4:04 am

I'm not sure I would say that Delta can "hold all OEMs to the fire". Everyone has their breaking point. For example, didn't Airbus threaten to not do business with Ryanair?
 
MSPNWA
Posts: 3698
Joined: Thu Apr 23, 2009 2:48 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 4:15 am

And "screaming good deal" may apply to purchase price, but in the end, after the airplane is retired, it may be a poor deal. There's a reason end of the line A333s, slow-selling A339s, and struggling A220s have lower purchase prices. The short and long-run downsides balance out the lower up-front cost. It's not like DL has this magic wand that no airline has. They've simply decided to go a different direction.
 
777Mech
Posts: 1061
Joined: Sun Sep 11, 2016 10:54 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 4:22 am

SteelChair wrote:
777Mech wrote:
par13del wrote:
I think the DL 777 fleet is less than 20 a/c, the 767's - all variants is more important from either OEM point of view, as of now, the replacement seems to have been chosen.


You best believe the likes of Atlas, UPS, FedEx and other 767 cargo operators have been banging on DL's door to buy the 767s as they retire.
I think they'll be able to cash out on these frames and then save some money with newer frames.

Also as a side note, DL is paying for all/most of these planes in cash, so in the event of a downturn, they'll have flexibility and they wont have to make payments


I sincerely doubt that anyone would want Delta 767s considering their high number of flight hours and chronological age. Many have over 100,00 flight hours. Now the JAL and ANA 767's built from 2005-10....thats a different story. Hasn't Fedex recently ordered and is taking delivery of new build 767s?. Finally, Delta learned their lesson on the DC9s when Boeing double crossed them and leased the traded in DC9s back to Airtran, which then proceeded to capacity dump them into ATL. Since that time, Delta prefers to fly airplanes out to their full economic lifetime and then see them scrapped.

39 of the 739s and 28 of the A321s have already been sold and leased back.

https://www.delta.com/us/en/about-delta ... nformation

It seems sometimes that people on this website just make stuff up.


Because CAM just didn't a buy 30 year old high time 763 from AA and will putting it through freighter conversion and an H check. But hey, whatever makes you feel better. These birds will be scooped up starting with the first one next year.
 
PSU.DTW.SCE
Posts: 8420
Joined: Mon Jan 28, 2002 11:45 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 4:54 am

FYI - There are some actual quotes out there from a few years ago that DL acquired 2nd hand MD-90s for betwen $1-9 M per frame, depending on the source, condition, and time remaining before a required heavy check.
 
strfyr51
Posts: 5106
Joined: Tue Apr 10, 2012 5:04 pm

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 8:12 am

727200 wrote:
Since the plane is such a slow seller, ,probably got a real good deal on them.

No Doubt,, Delta is not in the habit of spending needless money. You can bet they've researched that purchase down to the LAST nut and Bolt!!
 
strfyr51
Posts: 5106
Joined: Tue Apr 10, 2012 5:04 pm

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 8:31 am

TTailedTiger wrote:
eamondzhang wrote:
TTailedTiger wrote:

Flying around a half empty plane won't work. Some A330 flights get downguaged to 767's in winter. If what you say is true then that wouldn't happen and they would just fly empty seats for the better fuel burn. That's not how it works.

And what exact plane do you purpose to replace 767-300ER with? 787-8? Is that what you're trying to persuade? Sorry, but 787-8 is also in A330-800's capacity territory which DL can grab within months without too much trouble.

There is absolutely nothing to stop Delta from using A330neo, or even A350-900 to replace 767s as they see fit. No one writes on a book that says you have to replace 767-300ER with something that has a very similar capacity.

Michael


When did I say they couldn't? I was making the point that it isn't as black and white as they believe it to be. The 787 is more fuel efficient than the A330 but AF, KLM, Virgin, etc still operate both. It depends on the mission.

And yes, unless Airbus offers some new smaller widebody Delta will have no choice but to replace 767's with A330's. But some routes will not be able to handle that much capacity and will either be reduced or eliminated all together.
United is going to be king of the Pacific and Atlantic because they will have the right aircraft for the right mission.

I seem to get the impression that Delta wasn't all that interested in the Pacific in anything but cherry picked routes.
They have NO intention of matching United in the Pacific mainly because they merged with NORTHWEST who did match UA in the pacific and "frittered" their advantage away. I remember flying into NRT and seeing UA and NWA 747-400 tails all over the ramp and here comes Delta with a L1011. They decided to shut down most of Northwest's Asian routes after the merger. So now they've had a change of heart?? Seems a little too late now. I think they're looking for their alliance partners to take up their slack on all but a few KEY routes..
 
User avatar
seahawk
Posts: 9864
Joined: Fri May 27, 2005 1:29 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 9:21 am

MSPNWA wrote:
And "screaming good deal" may apply to purchase price, but in the end, after the airplane is retired, it may be a poor deal. There's a reason end of the line A333s, slow-selling A339s, and struggling A220s have lower purchase prices. The short and long-run downsides balance out the lower up-front cost. It's not like DL has this magic wand that no airline has. They've simply decided to go a different direction.

A good deal can also be something different than a low purchase price, especially for an airline with a large MRO section like Delta. Even if those RR engines would costs the same or more a the GEs, it might still be a good deal because DL got a deal as a MRO centre for those RR engines, meaning they can not only overhaul their own engines in house, but also overall the engines of other airlines.
 
BREECH
Posts: 645
Joined: Tue Jun 30, 2009 3:20 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 10:47 am

So even when buying new, Delta still prefers old. :-D
No friendship, love or respect unite people as much as shared hatred.
Sergey Dovlatov
 
BREECH
Posts: 645
Joined: Tue Jun 30, 2009 3:20 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 1:55 pm

Revelation wrote:
Then I guess DL's CEO is a fan boy too:

The No. 2 U.S. carrier wants to be one of the first to fly a potential new mid-sized jetliner from Boeing, said Delta Chief Executive Officer Ed Bastian.

That’s a vote of confidence from one of the most influential aircraft buyers as Boeing decides whether to build the plane, dubbed the 797 by analysts.

“You’re going to see us participate in Boeing’s middle-of-the-market campaign,” Bastian said. “I hope that we’re going to be a launch customer on that program as well.”

I bet Ed has some interesting paper that has lots of data on the 797.

Ref: https://www.bloomberg.com/news/articles ... ls-797-jet

Talk is cheap. Qantas was "on the campaign" for 777. Remind me, if you please, how many 777s does Qantas fly?
No friendship, love or respect unite people as much as shared hatred.
Sergey Dovlatov
 
User avatar
Revelation
Posts: 25011
Joined: Wed Feb 09, 2005 9:37 pm

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 2:11 pm

BREECH wrote:
Talk is cheap. Qantas was "on the campaign" for 777. Remind me, if you please, how many 777s does Qantas fly?

You are making my point.

Talk is cheap. The odds that DL will never order another Boeing product because of the BBD squabble are zero. They'll do what is in their best commercial interest.

And QF's CEO admitted that not taking 777s was a mistake

Qantas Group CEO Alan Joyce has suggested his airline’s order for the Airbus A380, A330 and Boeing 747-400ER placed in 2000 was, in hindsight, a mistake.

“It is great to be able to say I wish I could get in a time machine and go back to 2000 and [change] the fleet order [made by] not the last CEO, the CEO before that,” Joyce told an Australia Israel Chamber of Commerce lunch event in Sydney on Wednesday.

“But the reality is we have the aircraft we have. We just have to get on with life,” he said in comments reported by the Australian Financial Review.

Ref: http://australianaviation.com.au/2014/0 ... der-joyce/

From what we know of NMA and of Ed's statements, I'm sure a little thing like the BBD squabble won't prevent DL from ordering NMA or any other Boeing product that they feel gives them a commercial advantage. C series should be on property by the time NMA launches and the squabble will fade to insignificance.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 2:44 pm

strfyr51 wrote:
TTailedTiger wrote:
eamondzhang wrote:
And what exact plane do you purpose to replace 767-300ER with? 787-8? Is that what you're trying to persuade? Sorry, but 787-8 is also in A330-800's capacity territory which DL can grab within months without too much trouble.

There is absolutely nothing to stop Delta from using A330neo, or even A350-900 to replace 767s as they see fit. No one writes on a book that says you have to replace 767-300ER with something that has a very similar capacity.

Michael


When did I say they couldn't? I was making the point that it isn't as black and white as they believe it to be. The 787 is more fuel efficient than the A330 but AF, KLM, Virgin, etc still operate both. It depends on the mission.

And yes, unless Airbus offers some new smaller widebody Delta will have no choice but to replace 767's with A330's. But some routes will not be able to handle that much capacity and will either be reduced or eliminated all together.
United is going to be king of the Pacific and Atlantic because they will have the right aircraft for the right mission.

I seem to get the impression that Delta wasn't all that interested in the Pacific in anything but cherry picked routes.
They have NO intention of matching United in the Pacific mainly because they merged with NORTHWEST who did match UA in the pacific and "frittered" their advantage away. I remember flying into NRT and seeing UA and NWA 747-400 tails all over the ramp and here comes Delta with a L1011. They decided to shut down most of Northwest's Asian routes after the merger. So now they've had a change of heart?? Seems a little too late now. I think they're looking for their alliance partners to take up their slack on all but a few KEY routes..


Several points:

1 Delta cherry picks the globe. All companies seek out areas where money can be made and avoid areas where it can't, unless there is some strategic advantage. Normally those are limited cases.

2. What time frame are you talking about? The 1011s were gone 7-8 years prior to the merger.

3. Delta hasnt frittered away anything. The combination of the new HND runway, long range twins with Russian over flight, and not having a partner in Japan meant the NRT hub was going to be marginalized in the future. Given that the NRT hub was the prime asset of NWA, the future survival of NWA was doubtful.

4. They look for alliance partners to strengthen yields.They would have loved to have gotten JAL or ANA.

5. Never forget that the Japanese wanted the American carriers out. The 5th freedom rights were a reminder of a lost war and were a source of shame. They successfully pushed DAL out....50% success
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 3:17 pm

[photoid][code][/code][/photoid]
777Mech wrote:
SteelChair wrote:
777Mech wrote:

You best believe the likes of Atlas, UPS, FedEx and other 767 cargo operators have been banging on DL's door to buy the 767s as they retire.
I think they'll be able to cash out on these frames and then save some money with newer frames.

Also as a side note, DL is paying for all/most of these planes in cash, so in the event of a downturn, they'll have flexibility and they wont have to make payments


I sincerely doubt that anyone would want Delta 767s considering their high number of flight hours and chronological age. Many have over 100,00 flight hours. Now the JAL and ANA 767's built from 2005-10....thats a different story. Hasn't Fedex recently ordered and is taking delivery of new build 767s?. Finally, Delta learned their lesson on the DC9s when Boeing double crossed them and leased the traded in DC9s back to Airtran, which then proceeded to capacity dump them into ATL. Since that time, Delta prefers to fly airplanes out to their full economic lifetime and then see them scrapped.

39 of the 739s and 28 of the A321s have already been sold and leased back.

https://www.delta.com/us/en/about-delta ... nformation

It seems sometimes that people on this website just make stuff up.


Because CAM just didn't a buy 30 year old high time 763 from AA and will putting it through freighter conversion and an H check. But hey, whatever makes you feel better. These birds will be scooped up starting with the first one next year.


One plane does not a trend make. The New England Patriots bought two AA 767 s also. Ho hum.

Imho the majority will be chopped up, but we shall see. And my feelings have nothing to do with anything.
 
BREECH
Posts: 645
Joined: Tue Jun 30, 2009 3:20 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 5:37 pm

Revelation wrote:
BREECH wrote:
Talk is cheap. Qantas was "on the campaign" for 777. Remind me, if you please, how many 777s does Qantas fly?

You are making my point.

Not quite. Your point was that Delta's CEO saying they will be "on the campaign" for 797 proves that 797 exists. My point is that it proves absolutely nothing. The same way Sir Tim wants A380neo and Qantas wants a magic plane to fly 300 passengers non-stop from Sydney to London. 797 doesn't exist anywhere but in the Boeing fanboys' minds.
No friendship, love or respect unite people as much as shared hatred.
Sergey Dovlatov
 
BREECH
Posts: 645
Joined: Tue Jun 30, 2009 3:20 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 5:42 pm

SteelChair wrote:
The 5th freedom rights were a reminder of a lost war and were a source of shame.

May I ask you to elaborate on this a bit? How does the 5th freedom remind Japan of the war?
No friendship, love or respect unite people as much as shared hatred.
Sergey Dovlatov
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 5:53 pm

BREECH wrote:
SteelChair wrote:
The 5th freedom rights were a reminder of a lost war and were a source of shame.

May I ask you to elaborate on this a bit? How does the 5th freedom remind Japan of the war?


Those rights were only granted/allowed/dictated in the immediate aftermath of Worl War II. I can well imagine that in the early years both countries viewed them as essential given the devastated nature of Japanese economy and industry. As years passed and the Japanese economy rebuilt, they slowly became ever more unpopular/unnecessary in Japan. By the 80s and 90s, they were seen as a reminder of ignominious defeat. I remember reading about it at the time, the Japanese government wanted those rights to be taken away. Funny, they haven't yet asked for the 7th fleet to go away.....at least not in any significant numbers.

The similarities of the FRA Panam hub and the NRT NWA hub has always fascinated me. Imo they were cold war legacy operations doomed to eventual failure. Who could have predicted in the 1970s that a relatively small southeast carrier with no international rights would be tasked with dismantling both of them and rehabilitating as many of their recalcitrant employees as possible?
 
User avatar
Revelation
Posts: 25011
Joined: Wed Feb 09, 2005 9:37 pm

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 6:37 pm

BREECH wrote:
Revelation wrote:
BREECH wrote:
Talk is cheap. Qantas was "on the campaign" for 777. Remind me, if you please, how many 777s does Qantas fly?

You are making my point.

Not quite. Your point was that Delta's CEO saying they will be "on the campaign" for 797 proves that 797 exists. My point is that it proves absolutely nothing. The same way Sir Tim wants A380neo and Qantas wants a magic plane to fly 300 passengers non-stop from Sydney to London. 797 doesn't exist anywhere but in the Boeing fanboys' minds.

Congratulations, you've won today's pedantry award, and as an added bonus, you've labelled Keesje as a Boeing fanboy too!

The '797' does not exist in the physical sense, but it exists in the proposal sense, just like the 777 did when QF mistakenly rejected it.

DL knows enough about the '797's properties to be able to tentatively slot it in to their future plans if they chose to do so, with the caveat that there is a risk that it may not ever come to fruition.

That's what is important in the context of this discussion.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 6:48 pm

SteelChair wrote:
strfyr51 wrote:
TTailedTiger wrote:

When did I say they couldn't? I was making the point that it isn't as black and white as they believe it to be. The 787 is more fuel efficient than the A330 but AF, KLM, Virgin, etc still operate both. It depends on the mission.

And yes, unless Airbus offers some new smaller widebody Delta will have no choice but to replace 767's with A330's. But some routes will not be able to handle that much capacity and will either be reduced or eliminated all together.
United is going to be king of the Pacific and Atlantic because they will have the right aircraft for the right mission.

I seem to get the impression that Delta wasn't all that interested in the Pacific in anything but cherry picked routes.
They have NO intention of matching United in the Pacific mainly because they merged with NORTHWEST who did match UA in the pacific and "frittered" their advantage away. I remember flying into NRT and seeing UA and NWA 747-400 tails all over the ramp and here comes Delta with a L1011. They decided to shut down most of Northwest's Asian routes after the merger. So now they've had a change of heart?? Seems a little too late now. I think they're looking for their alliance partners to take up their slack on all but a few KEY routes..


Several points:

1 Delta cherry picks the globe. All companies seek out areas where money can be made and avoid areas where it can't, unless there is some strategic advantage. Normally those are limited cases.

2. What time frame are you talking about? The 1011s were gone 7-8 years prior to the merger.

3. Delta hasnt frittered away anything. The combination of the new HND runway, long range twins with Russian over flight, and not having a partner in Japan meant the NRT hub was going to be marginalized in the future. Given that the NRT hub was the prime asset of NWA, the future survival of NWA was doubtful.

4. They look for alliance partners to strengthen yields.They would have loved to have gotten JAL or ANA.

5. Never forget that the Japanese wanted the American carriers out. The 5th freedom rights were a reminder of a lost war and were a source of shame. They successfully pushed DAL out....50% success


Oh gosh, I don't agree that NRT was the prime asset of NWA. AMS was/is more important. DTW and MSP and their regional markets are a lot more important. NW already had a plan to overfly NRT with 787s and would have done okay. I say the same about US or CO - don't those footprints survive intact today? Yes their footprints are fine moneymakers today.

Deleting MEM was fairly important for DL's business model too. NW or UA hubs at NRT wasn't doing well in the 2000s by anyone's report. They were an intriguing strategic asset but they did not make money, according to any source I ever heard.
 
User avatar
coronado
Posts: 1278
Joined: Sat Jun 26, 1999 9:42 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 7:06 pm

BREECH wrote:
SteelChair wrote:
The 5th freedom rights were a reminder of a lost war and were a source of shame.

May I ask you to elaborate on this a bit? How does the 5th freedom remind Japan of the war?


The 5th Freedom rights that NWA had at Tokyo were imposed by the victorious power at the end of WWII. People may forget that until 1952 or 1953 anything that Japan was allowed to export had to state 'Made in Occupied Japan'. The US military were the de jure and de facto rulers of Japan. The occupying authorities allowed Japan Airlines to get set up only in 1951. But then as the 60's became the 70's and Japan rebuilt and became a trusted ally of the United States, especially as a bulwark against the communist government in the P.R. of China, Japan was allowed to assume more and more independent control of its economic, treaty, geopolitical and diplomatic roles. By the time Narita airport was built the Japanese government was pretty much back in full control and they could force the foreign airlines operating in Japan to leave Haneda and move to Narita. If all international flights including those by the Japanese carriers had been required to be concentrated at Narita I would think NWA (or rather its successor Delta) would still have a reasonable hub there, since I think they could still make money. Haneda was allowed to expand with additional international service from its domestic carriers and it became the preferred airport due to its proximity to the Tokyo megalopolis. New aircraft with overflight capabilities reduced the importance of operating a connecting hub in Japan. But yes the 5th freedom rights enjoyed by NWA (and UAL as successor to Panam) as time went on became more and more politically sensitive and are seen as a relic of a war that ended 60 years ago, and Japanese politicians maintain that Japan has proven time and time again since that time that they are a trustworthy ally. The Japanese government never had a say in awarding the 5th freedom rights so it is definitely a vestige of Occupied Japan. So Delta still has the 5th freedom rights, even as they get criticized by quite a few politicians in Japan, to operate out of NRT (or HND if they could ever get all the necessary slots and gates at the times needed to support a one or two bank hub), but the current split airport arrangement, and just getting a drip-drip-drip of an ill timed new slot at HND here and there, has made a bad situation worse, profit wise.
The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 7:11 pm

Flighty wrote:
SteelChair wrote:
strfyr51 wrote:
I seem to get the impression that Delta wasn't all that interested in the Pacific in anything but cherry picked routes.
They have NO intention of matching United in the Pacific mainly because they merged with NORTHWEST who did match UA in the pacific and "frittered" their advantage away. I remember flying into NRT and seeing UA and NWA 747-400 tails all over the ramp and here comes Delta with a L1011. They decided to shut down most of Northwest's Asian routes after the merger. So now they've had a change of heart?? Seems a little too late now. I think they're looking for their alliance partners to take up their slack on all but a few KEY routes..


Several points:

1 Delta cherry picks the globe. All companies seek out areas where money can be made and avoid areas where it can't, unless there is some strategic advantage. Normally those are limited cases.

2. What time frame are you talking about? The 1011s were gone 7-8 years prior to the merger.

3. Delta hasnt frittered away anything. The combination of the new HND runway, long range twins with Russian over flight, and not having a partner in Japan meant the NRT hub was going to be marginalized in the future. Given that the NRT hub was the prime asset of NWA, the future survival of NWA was doubtful.

4. They look for alliance partners to strengthen yields.They would have loved to have gotten JAL or ANA.

5. Never forget that the Japanese wanted the American carriers out. The 5th freedom rights were a reminder of a lost war and were a source of shame. They successfully pushed DAL out....50% success


Oh gosh, I don't agree that NRT was the prime asset of NWA. AMS was/is more important. DTW and MSP and their regional markets are a lot more important. NW already had a plan to overfly NRT with 787s and would have done okay. I say the same about US or CO - don't those footprints survive intact today? Yes their footprints are fine moneymakers today.

Deleting MEM was fairly important for DL's business model too. NW or UA hubs at NRT wasn't doing well in the 2000s by anyone's report. They were an intriguing strategic asset but they did not make money, according to any source I ever heard.


Wasn't NWA predominantly a Pacific airline?

It does seem ironic to hear former NWA employees (not referring to you) whine about Delta pulling back in the Pacific, and then hear those same folks talk about the 787 and NWA's plans going forward without the NRT hub. Without a Japanese partner, the NRT hub was going away no matter what. I've always wondered how the 787 delays played into Richard Andersons perceived bias against Boeing.

While the KLM tie up with AMS was valuable, and remains valuable, NWA was a marginal player in the marginally profitable North Atlantic.

DTW and MSP together are smaller than ATL. Many of the regional markets were/are EAS cities served with RJs. Hardly the makings of an industry behemoth there. WRT their footprint, one poster here continually weighs in about the shrinking/static DTW market......:)

CO = CLE hub gone.
US = PIT hub gone.
Its a stretch to say their footprints survive.
 
TTailedTiger
Posts: 2757
Joined: Sun Aug 26, 2018 5:19 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 7:33 pm

SteelChair wrote:
Flighty wrote:
SteelChair wrote:

Several points:

1 Delta cherry picks the globe. All companies seek out areas where money can be made and avoid areas where it can't, unless there is some strategic advantage. Normally those are limited cases.

2. What time frame are you talking about? The 1011s were gone 7-8 years prior to the merger.

3. Delta hasnt frittered away anything. The combination of the new HND runway, long range twins with Russian over flight, and not having a partner in Japan meant the NRT hub was going to be marginalized in the future. Given that the NRT hub was the prime asset of NWA, the future survival of NWA was doubtful.

4. They look for alliance partners to strengthen yields.They would have loved to have gotten JAL or ANA.

5. Never forget that the Japanese wanted the American carriers out. The 5th freedom rights were a reminder of a lost war and were a source of shame. They successfully pushed DAL out....50% success


Oh gosh, I don't agree that NRT was the prime asset of NWA. AMS was/is more important. DTW and MSP and their regional markets are a lot more important. NW already had a plan to overfly NRT with 787s and would have done okay. I say the same about US or CO - don't those footprints survive intact today? Yes their footprints are fine moneymakers today.

Deleting MEM was fairly important for DL's business model too. NW or UA hubs at NRT wasn't doing well in the 2000s by anyone's report. They were an intriguing strategic asset but they did not make money, according to any source I ever heard.


Wasn't NWA predominantly a Pacific airline?

It does seem ironic to hear former NWA employees (not referring to you) whine about Delta pulling back in the Pacific, and then hear those same folks talk about the 787 and NWA's plans going forward without the NRT hub. Without a Japanese partner, the NRT hub was going away no matter what. I've always wondered how the 787 delays played into Richard Andersons perceived bias against Boeing.

While the KLM tie up with AMS was valuable, and remains valuable, NWA was a marginal player in the marginally profitable North Atlantic.

DTW and MSP together are smaller than ATL. Many of the regional markets were/are EAS cities served with RJs. Hardly the makings of an industry behemoth there. WRT their footprint, one poster here continually weighs in about the shrinking/static DTW market......:)

CO = CLE hub gone.
US = PIT hub gone.
Its a stretch to say their footprints survive.


Yes Northwest was quite the force to be reckoned with in Asia. But as far as their transatlantic operations went they offered little more than a shuttle to AMS. And they had nothing in India, Midde East, Africa, and South America. Delta was weak in Asia but they were overall the more well-rounded airline.
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 7:46 pm

TTailedTiger wrote:
SteelChair wrote:
Flighty wrote:

Oh gosh, I don't agree that NRT was the prime asset of NWA. AMS was/is more important. DTW and MSP and their regional markets are a lot more important. NW already had a plan to overfly NRT with 787s and would have done okay. I say the same about US or CO - don't those footprints survive intact today? Yes their footprints are fine moneymakers today.

Deleting MEM was fairly important for DL's business model too. NW or UA hubs at NRT wasn't doing well in the 2000s by anyone's report. They were an intriguing strategic asset but they did not make money, according to any source I ever heard.


Wasn't NWA predominantly a Pacific airline?

It does seem ironic to hear former NWA employees (not referring to you) whine about Delta pulling back in the Pacific, and then hear those same folks talk about the 787 and NWA's plans going forward without the NRT hub. Without a Japanese partner, the NRT hub was going away no matter what. I've always wondered how the 787 delays played into Richard Andersons perceived bias against Boeing.

While the KLM tie up with AMS was valuable, and remains valuable, NWA was a marginal player in the marginally profitable North Atlantic.

DTW and MSP together are smaller than ATL. Many of the regional markets were/are EAS cities served with RJs. Hardly the makings of an industry behemoth there. WRT their footprint, one poster here continually weighs in about the shrinking/static DTW market......:)

CO = CLE hub gone.
US = PIT hub gone.
Its a stretch to say their footprints survive.


Yes Northwest was quite the force to be reckoned with in Asia. But as far as their transatlantic operations went they offered little more than a shuttle to AMS. And they had nothing in India, Midde East, Africa, and South America. Delta was weak in Asia but they were overall the more well-rounded airline.


NWA was also in a very weak position in NYC (a long stated Delta target) and their operations in LAX and SEA were only marginal. Check out how Delta does in the cornerposts today.....hehehe.
 
Okcflyer
Posts: 716
Joined: Sat May 23, 2015 11:10 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 8:10 pm

I get the impression that Delta executives are concerned about overgrowth / over capacity in many international markets.

The 339 downgauge reduces trip cost and capital outlay whist providing a competitive CASM.

Delta will focus on revenue management and maximizing RASM for the seats available. I get the impression they are not confident they can materially fill the remaining seats at reasonable yields.

The 339 is 3 Y-class rows shorter in addition to the 1 seat narrowe layout and accounts for about 10-12% capacity reduction.

The A339neo should have lower trip fuel due to smaller frame, less wetted area, and lower weight. I also expect lower engine maintenance cost per hour as the T7000 is 12klbs less thrust ... each...and the expensive components are identical to the T1000 TEN.

From a fleet diversification perspective, this provides 10 more frames in “medium” size but with better payload/range and efficiency on longer routes where the older ceo’s begin to struggle.

The 359’s are practically the same size as DL’s 77L’s and they’ll still have enough to deploy on critical routes where the 359’s performance and size is ideal until later they replace 777 fleet.

DL’s financing strategy generally doesn’t consider residual values as important and discounts the 787 marketability advantage. While most companies would not be able to do this, DL has a few key enablers to allow it
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 8:26 pm

Okcflyer wrote:
I get the impression that Delta executives are concerned about overgrowth / over capacity in many international markets.


Yes. A million times yes. I rarely agree with Richard Aboulaifa (spelling?) but he has a great article in the most recent Aviation Week about the dearth of large airplane orders. The airlines are finally being capaciry disciplined internationally.

Okcflyer wrote:
The 339 downgauge reduces trip cost and capital outlay whist providing a competitive CASM.

Delta will focus on revenue management and maximizing RASM for the seats available. I get the impression they are not confident they can materially fill the remaining seats at reasonable yields.

The 339 is 3 Y-class rows shorter and 1 seat less wide which is about 10-12% capacity reduction.

The A339neo should have lower trip fuel due to smaller frame, less wetter area and lower weight and lower engine maintenance cost per hour (T7000 is 12klbs less thrust ... each)

From a fleet diversification perspective, this provides 10 more frames in “medium” sized but with better payload/range and efficiency on longer routes where the older ceo’s begin to struggle.

The 359’s are practically the exact same size as DL’s 77L’s and they’ll still have enough to deploy on critical routes where the 359’s performance and size is ideal.

DL’s financing strategy generally doesn’t consider residual values important. While most companies would not be able to do this, DL has a few key enablers to allow it. The market as a whole could not do this but it does leave a few openings for older, established, strong balance sheet companies like DL.


The only problem is that the 339 is an inferior product to the 787. Cabin alt., etc., etc., etc. But, Delta has shown an ability to do well with inferior airplanes, witness MD88/90. And, they already have a ton of A330s, parts, simulators, trained people, etc.
 
Okcflyer
Posts: 716
Joined: Sat May 23, 2015 11:10 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 8:58 pm

SteelChair wrote:

The only problem is that the 339 is an inferior product to the 787. Cabin alt., etc., etc., etc. But, Delta has shown an ability to do well with inferior airplanes, witness MD88/90. And, they already have a ton of A330s, parts, simulators, trained people, etc.


A339 is maybe 3% higher trip fuel then an 789.

3% can be offset with purchase price and other contractual additions (MRO work, maintenance guarantees, etc)

In CASM comparisons, the 789 wins by 5+% due to its better cabin density. Trip fuel is fairly close.

If you’re willing to go 9-wide in Y like Air Asia, the 339 actually slightly beats the 789 in CASM
 
User avatar
Revelation
Posts: 25011
Joined: Wed Feb 09, 2005 9:37 pm

Re: Reuters: Airbus likely sold 10 A330neo jets to Delta

Sun Nov 18, 2018 9:36 pm

coronado wrote:
to operate out of NRT (or HND if they could ever get all the necessary slots and gates at the times needed to support a one or two bank hub), but the current split airport arrangement, and just getting a drip-drip-drip of an ill timed new slot at HND here and there, has made a bad situation worse, profit wise.

They almost had that, via their bid for Skymark when it was in bankruptcy. ANA's reaction (they were even willing to buy three whales to win Airbus's votes!) shows how desperate they were to prevent DL from improving their position at HND. As you wrote, keeping HND open has derailed NRT. In the end, the farmers might end up with what they wanted all along.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
mjoelnir
Posts: 9411
Joined: Sun Feb 03, 2013 11:06 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 10:25 pm

SteelChair wrote:

The only problem is that the 339 is an inferior product to the 787. Cabin alt., etc., etc., etc. .


Is that just your opinion or can you back that up?

Flying the A330 8 across against the 787 9 across (the 787 has to do 9 a row to show a better CASM), I know what I would prefer.
 
SteelChair
Posts: 1475
Joined: Fri Aug 25, 2017 11:37 am

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 10:28 pm

Okcflyer wrote:
SteelChair wrote:

The only problem is that the 339 is an inferior product to the 787. Cabin alt., etc., etc., etc. But, Delta has shown an ability to do well with inferior airplanes, witness MD88/90. And, they already have a ton of A330s, parts, simulators, trained people, etc.


A339 is maybe 3% higher trip fuel then an 789.

3% can be offset with purchase price and other contractual additions (MRO work, maintenance guarantees, etc)

In CASM comparisons, the 789 wins by 5+% due to its better cabin density. Trip fuel is fairly close.

If you’re willing to go 9-wide in Y like Air Asia, the 339 actually slightly beats the 789 in CASM


I doubt D would ever go 9 abreast on the A330. They have resisted the urge to go 10 abreast on the 777.
 
PlanesNTrains
Posts: 9524
Joined: Tue Feb 01, 2005 4:19 pm

Re: Delta orders 10 A330-900 neo's, defers 10 A350-900's

Sun Nov 18, 2018 10:30 pm

mjoelnir wrote:
SteelChair wrote:

The only problem is that the 339 is an inferior product to the 787. Cabin alt., etc., etc., etc. .


Is that just your opinion or can you back that up?

Flying the A330 8 across against the 787 9 across (the 787 has to do 9 a row to show a better CASM), I know what I would prefer.


It's just opinion, as is yours.

To add: viewtopic.php?t=775137

Matt6461 wrote:
We've had some interesting debates over true CASM comparisons are possible. I'm firmly on the side that they are, but that to do so you have to adopt standardized cabin assumptions or compare cost per average floor area (m2 or ft2): therefore I like to use CAM2 instead of CASM sometimes.

CAM2 isn't perfect because different cabin cross sections have implications for seating density, which in turn has implications for RASM and overall profitability. A 10-abreast 77W has better CASM than a 9-abreast 77W, but some airlines (SQ, CX) believe profitability is better at 9-abreast.

Everything I've read gives the (9-abreast) 787 a ~1-4% CASM advantage over the A330NEO for a 4,000nm trip at each size segment. One way to approximate the impact of 8 v. 9 for the 787 is as follows:

-assume cabin area is ~55% Y for both planes at 8-abreast.
-take away 11% of 787 Y seating for 8-abreast, roughly 6% of seats.
-decrease 787 trip cost by ~1-2% for lower weight and cabin crew expense at 8-abreast.
-total delta is now 4-5%
-787 and A330NEO are about equal or A330 slightly ahead if both are 8-abreast.
-But in this scenario 787 probably has an RASM advantage due to wider seats at 8-abreast.

This result is surprising because 787 is clean sheet CFRP versus aluminium. It pays a penalty for its extra range.


I'd take an 8-abreast 787 over an 8-abreast A330 any day. Too bad carriers go for the extra revenue.
Last edited by PlanesNTrains on Sun Nov 18, 2018 10:34 pm, edited 1 time in total.
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos