There's a concept in economics called minimum efficient scale... basically the earliest point where greater scale drives no or only trivial reductions in cost.
While admittedly the 738s and 737s will eventually be retired, right now Delta has 217 737NGs and 219 A32Xceos (if you include the A321 still being delivered).
Each of those fleets on their own would put Delta in the top 25 airlines in the world by fleet size.
Fleet commonality at that scale won't drive much value. Would it drive some? Maybe, but it would be trivial.. we're talking about maybe a 1-2% reduction in costs. Which sounds like a lot, but to get there would require a lot of investment. And, there are less measurable costs to consider. What happens if the A320 family has a MAX-like issue (or vice-versa) that grounds the fleet? How does having only one airline type impact negotiating power? And all these other issues that basically neutralize whatever tiny savings you could drive from commonality.
Point is, Delta is already at minimum efficient scale with 200+ aircraft subfleets. The value of commonality below that is de minimus.
Before someone raises Southwest or Ryanair as a counterpoint, keep in mind that Delta's business model is fundamentally different. When you eliminate ALL OTHER types you gain an extra scale point - you eliminate an entire administrative overhead apperatus and business processes associated with multi-type management. My scheduling system can be completely dumb (ala WN... their systems are out of the stone age, but it works because.. well, all their planes and pilots are essentially identical cogs). Delta is going to have to manage multiple types regardless, so the simplification from consolidation from 7 types to 6 is far less compelling. Going from 2 to 1 (or vice versa) is a much bigger step change than 7 to 6 from a business operations perspective.
True that, but we also need to realized that by going all Airbus, they would acquire Airbus-only operator discounts for their purchase. We are talking about up to hundreds of millions in savings to purchase brand new aircraft. This is probably gonna be the main reason for them to go All Airbus in the next decade or so.
There is no magic airbus only operator discount you get discounts by negotiating hard having other options and ordering in large volumes dealing with delta is kind of a necessary evil for both Airbus and Boeing in that they will take end of the line and second-hand jets, which is a necessary part of the market especially for the lessors who are buying large numbers of jets for airlines with questionable financial stability because they know that is AirAsia collapses tomorrow there are few companies who might pick up the aircraft at lower than ideal price points yes but its better having no one interested in picking up the jets.
Agreed. Sometimes loyal customers were guaranteed best pricing, but IIRC with Boeing the WTO ruled such practices uncompetitive and that airlines were freed of their obligations of that part of the contract (Airbus cannot enforce).
Delta is an airline with effectively 3 large subfleets
1. High utilization. This is what the A321NEOs are for.
2. Mid utilization. Usually end if line (739, A321CEO) heavily discounted or bought used.
3. Low utilization. This is what the MD-90s and 717s were brought in for (not original MD-90s, but later purchases).
In general, Delta places a high risk on debt. If an airline is deep in debt, the opportunities are missed. So Delta places more emphasis on keeping fixed costs low while accepting higher variable costs. Delta has disciplined yield management coupled with good capacity management. However, they react with an allergy if high profit routes are threatened.
I will be surprised if Boeing and CFM do not offer Delta good engine spare part pricing with a low initial price. Right now, I speculate, Boeing would accept lower profit than Airbus and CFM would match the Pratt engine service contact terms to allow Delta to service all LEAP just as DL gets to service the GTF fleet. As much of a Pratt fan as I am, the business case for Delta TechOps to break in to LEAP service before the CFM-56 sunset is just too lucrative an opportunity to be ignored.
Delta opperates 217 of the 737NG, none on order.
Delta opperates 219 A32x (all CEO) with 127 on order (27 A321CEO, 100 A321NEO) + options.
While Airbus pulled a coup on widebodies, much due to RR allowing T1000, T7000, and Txwb overhaul at a profit and allowing DL to bid power by the hour work from RR, I see no reason a bid from Boeing wouldn't be considered.
I see DL probably buying 100 to 200 MAX plus used aircraft. If Boeing isn't able to secure a DL order by 3Q2021, shame on them.
I have flown DL A319s, A321s, 752s, and 739s and honestly, as long as I'm not in the very back, I like them all. This is about money. For Delta, the -8, -9, and -10 MAX could all replace the A320s.
I personally do not see the A320s leaving soon. But it is time to age them into a lower utilization role. I would also expect DL to buy used (but newer, say end of line to 12 years old CEOs) A320CEO.
WN and the MAX debacle boosted 738 prices above long term trend. Now, they both dropped. At best a CEO or 737NG lost 14% of value so far in Covid19.https://leehamnews.com/2020/06/10/hotr- ... more-33677
So bargain or DL has no reason not to buy used and could buy used Pratt NEOs. That should scare both Boeing and Airbus. It will be 18 to 30 months before enough recovery happens to soak up enough past generation aircraft to stabilize pricing.
I see Boeing offering compensation that would make the MAX competitive for Delta. I have not seen similar discounting by Airbus. I think DL will have no trouble replacing shed aircraft with economical used if that is the plan.
Discussion on Aircraft values should continue here:viewtopic.php?f=3&t=1440991&start=50
Winter is coming.