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dtwpilot225
Topic Author
Posts: 274
Joined: Tue Dec 13, 2011 1:31 am

Delta 321 neo status

Sun May 10, 2020 8:53 pm

In these times of uncertainty I wonder what will become of this 100 plane 100 option order. First one was due 4q this year.
Will it be canceled? Pushed way back, or will positive come in the form of keeping it and converting some to xlr to offset some 757 flying?
My gut tells me they still come just don’t know when
 
ctrabs0114
Posts: 1080
Joined: Mon Oct 09, 2017 8:09 am

Re: Delta 321 neo status

Sun May 10, 2020 9:34 pm

I'd think the 321N order is going to end up being delayed at least a year depending on the service reductions post-COVID compared to this time last year.
2019: DAL, MCI, PHX, LAS, DFW, SAT, ORD, SLC, SEA, DTW, PHL, MIA, LAX; B73G (WN x3), B738 (WN, AA, DL), A20N (NK), MD83 (AA), B788 (AA x2), CS1 (DL), B739 (DL), B712 (DL), B752 (AA), B763 (AA), B77W (AA), B789 (AA)
Next: TBA
 
BTV290
Posts: 43
Joined: Sun Jan 06, 2019 7:33 pm

Re: Delta 321 neo status

Sun May 10, 2020 9:54 pm

Aircraft economics is, like, the opposite of my strong suite, so bear with me... What's the comparison like for getting some of these newer aircraft on property that are more efficient and have lower operating costs (but come with the fresh cost of purchase) vs. deferring those orders and continuing to operate older less efficient aircraft that have higher operating costs but are already paid for?
 
MIflyer12
Posts: 8060
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta 321 neo status

Sun May 10, 2020 11:09 pm

The difference in fuel burn new vs. old is well understood. People in the know can size the variable maintenance costs. What we don't know is cost of deferral - will Airbus push out deliveries 3,4,5+ years at a minimal cost?

I suspect that 757s and A320s will, for some time, play the role previously taken by the MD-88s as low-utilization, swing capacity.
 
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FLALEFTY
Posts: 778
Joined: Tue Jan 31, 2006 11:33 am

Re: Delta 321 neo status

Mon May 11, 2020 2:35 am

dtwpilot225 wrote:
In these times of uncertainty I wonder what will become of this 100 plane 100 option order. First one was due 4q this year.
Will it be canceled? Pushed way back, or will positive come in the form of keeping it and converting some to xlr to offset some 757 flying?
My gut tells me they still come just don’t know when


I imagine that Delta is working with Airbus to defer the A321N's out a couple of years, but they will probably have to go ahead with the scheduled deliveries of the A223's, A359's and A339's they also have coming this year and next year as part of the deal.
 
hsuthe19
Posts: 24
Joined: Sun Oct 06, 2019 3:22 pm

Re: Delta 321 neo status

Mon May 11, 2020 2:44 am

Could it also be possible some of these orders for the A321N could be converted to a223s given that demand will not be so high for the next few years?
 
WidebodyPTV
Posts: 267
Joined: Fri Sep 20, 2019 9:06 pm

Re: Delta 321 neo status

Mon May 11, 2020 4:14 am

The order won't be cancelled -- DL has several hundred mainline jets up for renewal this decade. The order will likely be deferred, and it's possible some of the latter frames won't be delivered for a decade, but the likelihood of the A320, B738 and B757 operating until they're 40-years-old is doubtful.
 
questions
Posts: 2337
Joined: Thu Sep 15, 2011 4:51 am

Re: Delta 321 neo status

Mon May 11, 2020 6:38 am

Based on what we know today (things may change), what is the A321N’s mission/role in Delta’s network?
 
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FLALEFTY
Posts: 778
Joined: Tue Jan 31, 2006 11:33 am

Re: Delta 321 neo status

Mon May 11, 2020 5:15 pm

questions wrote:
Based on what we know today (things may change), what is the A321N’s mission/role in Delta’s network?


Delta's original order of 100 A321N's was to start replacing the B752 and parts of the B738 and A320 fleets.
 
tvh
Posts: 204
Joined: Wed Jun 15, 2016 7:41 am

Re: Delta 321 neo status

Mon May 11, 2020 6:10 pm

Now that the B757 are parked and where they could stay for somtime, it could be costly to put them back in service. Them more reason to replace them when times get better.
 
MIflyer12
Posts: 8060
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta 321 neo status

Mon May 11, 2020 6:45 pm

Can you compare the cost of bringing an aircraft out of storage to the acquisition cost of a 321neo?

The losses and borrowings by U.S. carriers to get thru COVID-19 will depress capital spending for years. There will be no new aircraft bingeing.
 
PSU.DTW.SCE
Posts: 8063
Joined: Mon Jan 28, 2002 11:45 am

Re: Delta 321 neo status

Mon May 11, 2020 6:57 pm

tvh wrote:
Now that the B757 are parked and where they could stay for somtime, it could be costly to put them back in service. Them more reason to replace them when times get better.

Unless, I completely missed something, DL has not parked nor as made any internal/rumored announcements of parking the 757s.
Only the MD88 and MD90 is officially done.


The reality is that there has been nothing officially communicated about the status and timing of any future deliveries from Airbus to DL.
This is all subject to negotiations on both sides.
DL really has no need for any future deliveries until at least Summer 2022
Airbus can't just completely shutdown and/or suspend all deliveries to all customers without a lot of ramifications to their financial situation or supply chain
Both sides will likely have to meet in the middle and come up with some terms/financial arrangements that are amicable to both parties.

The orders will all happen, just on a revised time frame.

My speculation is that there is likely more ability to deffer and spread out the balance of the A321 CEO, A321 NEO, and A359 deliveries versus the A220 & A339 deliveries where even with reduced monthly rates, DL has disproportionate amount of the backlog of these types.
 
boyspot
Posts: 8
Joined: Mon Sep 19, 2005 11:35 am

Re: Delta 321 neo status

Mon May 11, 2020 7:27 pm

It will depend on the financing that they are using. If they are doing a sale and leaseback and have made progress payments, they can actually be cash positive in the short term to take delivery. I would have thought narrowbodies were safer than widebodies at this point and Airbus has made recent announcements that they see the narrowbody market being the one that recovers faster.
 
gloom
Posts: 468
Joined: Thu Jun 30, 2016 4:24 pm

Re: Delta 321 neo status

Tue May 12, 2020 7:18 am

hsuthe19 wrote:
Could it also be possible some of these orders for the A321N could be converted to a223s given that demand will not be so high for the next few years?


Hardly possible.

You don't buy a fleet of new ones for 2-3 years. You assume some 8-10 as minimum, with some 16-18 usually a reasonable target.
Also, when switching to smaller, if/when everyone wants to do so, wouldn't save you capital as A would want to keep the value, most likely. Is there a reason to buy more, smaller planes? I don't think so.

So, basically I have a feeling it's not worth it. What others say (postpone some, and basically extend the contract timeframe) is much more likely.

Cheers,
Adam
 
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DL717
Posts: 2153
Joined: Wed May 23, 2018 10:53 pm

Re: Delta 321 neo status

Tue May 12, 2020 7:34 am

They will definitely need them in the medium term, but they could probably defer them for a bit due to the drop in fuel prices. Maybe a 12-18 month deferral.
Welcome to Nothingburgers. May I take your order?
 
pugman211
Posts: 527
Joined: Thu Dec 20, 2012 1:55 pm

Re: Delta 321 neo status

Tue May 12, 2020 7:42 am

The first one isn't due till end of this year I think with majority over 2021 onwards
 
JonesNL
Posts: 164
Joined: Tue Aug 06, 2019 2:40 pm

Re: Delta 321 neo status

Tue May 12, 2020 8:41 am

I think the strategy of Airbus will be to defer A32x but keep A22x. They can probably fill the A32x slots with the production reduction elsewhere, but deferring A22x will probably mean that the program will never make a dime of profit before its NEO/MAX/NG upgrade. They need the numbers to break even mid decade.
 
DylanHarvey
Posts: 368
Joined: Thu Feb 01, 2018 5:45 pm

Re: Delta 321 neo status

Tue May 12, 2020 9:17 am

They won’t need anything, travel won’t be normal until late 2024-2025.
 
KFTG
Posts: 858
Joined: Sun Apr 28, 2019 12:08 am

Re: Delta 321 neo status

Tue May 12, 2020 9:18 am

DylanHarvey wrote:
They won’t need anything, travel won’t be normal until late 2024-2025.

Was that a scientific poll?
 
DylanHarvey
Posts: 368
Joined: Thu Feb 01, 2018 5:45 pm

Re: Delta 321 neo status

Tue May 12, 2020 10:31 am

KFTG wrote:
DylanHarvey wrote:
They won’t need anything, travel won’t be normal until late 2024-2025.

Was that a scientific poll?

:) I’m just like all of us, fed up of this.
On a serious note, I believe the Neo’s will be taken in 2021, according to TSA numbers it is close to 27% higher passenger volume than last week already. We should see a return to normality in a few months.
 
dtwpilot225
Topic Author
Posts: 274
Joined: Tue Dec 13, 2011 1:31 am

Re: Delta 321 neo status

Tue May 12, 2020 11:02 am

My prediction would be they take the neo on time and retire domestic 757 early. I also hope they take more 220-300 models to replace 717/md88/320
 
ewt340
Posts: 1272
Joined: Tue Jul 10, 2012 7:22 pm

Re: Delta 321 neo status

Tue May 12, 2020 11:04 am

Quite the opposite, swap most of the orders for LR/XLR version and then downscale TATL operations using A321LR/XLR if possible.
 
Dalmd88
Posts: 3139
Joined: Fri Jul 28, 2000 3:19 am

Re: Delta 321 neo status

Tue May 12, 2020 12:03 pm

PSU.DTW.SCE wrote:
tvh wrote:
Now that the B757 are parked and where they could stay for somtime, it could be costly to put them back in service. Them more reason to replace them when times get better.

Unless, I completely missed something, DL has not parked nor as made any internal/rumored announcements of parking the 757s.
Only the MD88 and MD90 is officially done.


The reality is that there has been nothing officially communicated about the status and timing of any future deliveries from Airbus to DL.
This is all subject to negotiations on both sides.
DL really has no need for any future deliveries until at least Summer 2022
Airbus can't just completely shutdown and/or suspend all deliveries to all customers without a lot of ramifications to their financial situation or supply chain
Both sides will likely have to meet in the middle and come up with some terms/financial arrangements that are amicable to both parties.

The orders will all happen, just on a revised time frame.

My speculation is that there is likely more ability to deffer and spread out the balance of the A321 CEO, A321 NEO, and A359 deliveries versus the A220 & A339 deliveries where even with reduced monthly rates, DL has disproportionate amount of the backlog of these types.

We have parked a bunch of every aircraft. Only the MD88/90 are the permanent retired parked as of right now. Most likely some of the 767/757 will move into the retired category soon also.
 
MIflyer12
Posts: 8060
Joined: Mon Feb 18, 2013 11:58 pm

Re: Delta 321 neo status

Tue May 12, 2020 12:25 pm

Dalmd88 wrote:
We have parked a bunch of every aircraft. Only the MD88/90 are the permanent retired parked as of right now. Most likely some of the 767/757 will move into the retired category soon also.


Yes, probably. I'll look for a press release, earnings call statement/transcript, or SEC filing to confirm it. Then I'll accept it as fact. Same thing with Airbus delivery deferrals.

I will really encourage the bunch thinking DL is going to take 200 new aircraft for a wholescale fleet renewal (dumping 757, 767, 738 - whatever you irrationally hate) over the next three years to look at cash flows. It's just not gonna happen. They won't won't have the free cash flow. They won't be able to get the financing on terms they'd want to pay. United put up 360 aircraft as collateral for a $2.25 Billion bond issue at 11% and withdrew it for lack of interest.

https://www.bloomberg.com/news/articles ... isappoints

The alternative of borrowing at 11+% pays for a lot of maintenance and incremental fuel burn in older aircraft. When you don't know demand - and the CEOs of all the U.S. Big 4 carriers have said they don't know when demand is coming back -- old, paid-off aircraft that can have have low utilization are a gift.

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