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rbavfan
Posts: 4222
Joined: Fri Apr 17, 2015 5:53 am

Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 5:30 pm

ifIHadWings wrote:
As I recall, Delta made a deal with P&W to be an MRO for the P&W geared turbofan engines on the A220s and A320 NEOs, but couldn't get a similar deal with CFM for the engines used on the B-737Max. As such, it would seem Delta is highly likely to buy A320NEO aircraft instead of B-737Max for the remainder of this decade unless CFM changes their mind about engine maintenance contracts. It seems to me this shouldn't be so much a Boeing vs. Airbus discussion, as a CFM vs P&W discussion. Since P&W engines are only pared with the A220 and A320 families and not with the B-737Max, that seems to limit what Delta is likely to buy for now.

Also, in their Apr 22, 2021 press release, Delta said "Delta’s total purchase commitment for the A321neo will now be 125 firm aircraft, with 100 purchase rights." As such, with 100 existing options for the A321, they definitely have room to grow their A320 family order in the coming years if they want/need to add some incremental aircraft. Also, I don't see Delta wanting to add a new fleet type (i.e. B-737Max) unless they have a need for something like 75-100 new planes AND they can get CFM to make a deal. Sure, one group of pilots could be used with both the B-737Max and B-737NG, but there would still be extra incremental/difference training. Plus spare parts to buy, and the like. They'd be better off just converting some of their 100 options on A321s rather than adding a new sub-fleet.

Also, in their Apr 22, 2021 press release, Delta said (emphasis mine) "The new aircraft [A321neos] will be deployed primarily across Delta’s extensive domestic network." I don't think Delta is worried about planes with A321XLR type range at the moment. I think they are planning for planes with enough range to fly ATL-SEA, but that are also good (and cheap/light) enough to fly routes like ATL-MCO. Delta doesn't want to pay extra for heavier planes that have excess range compared to their needs.

Also, for those thinking Delta might care about only buying modern, fly-by-wire aircraft, keep in mind we are discussing the company that just last year retired their MD88 and MD90 fleets. And they still plan to operate MD95s (B-717s) until roughly 2025. Delta cares about high dispatch reliability, minimizing debt, maximizing their credit rating, cost of operation, being able to buy replacement parts, and the like. I really don't think they care if their fleet is "modern."

Realistically, I would GUESS this is what Delta is telling their suppliers:
Boeing: What are your plans for a 150-200 seat Yellowstone-1/NSA/737 replacement for delivery starting in about 2029-2031, give or take? We'll be in the market for some planes of that size then; either some NSAs or heavily discounted, last off the line, B-737Maxes.

Airbus: Got any plans to not only launch the A220-500 (at a price and with a seat count and range that is to our liking), while also funding and building a final assembly line for those planes in the USA so we can avoid import duties? If so, let's talk about some possible orders with deliveries starting in either the 2025 or 2030 time frame (assuming you also are going to do a nice efficiency upgrade on the A220 program by 2030).

Airbus and Boeing: Got any plans to launch and start delivery, in 2025 or so, of something with more seats and a longer range than an A321XLR but also with fewer seats, a shorter range, and a lower per-seat cost (for both in terms of initial acquisition cost and long term operational cost) than a B-787-8 or an A330-800? We're expecting to run out of B-767-300ERs around then and might want to keep flying routes of similar distance and with similar passenger demand. Or we might just give up on operating those routes and just hope our customers will agree to fly to partner hubs in Europe, Asia, and S. America on larger aircraft and accept an extra connection. Or maybe international flying won't have recovered by then and we will just shrink. So really, we're saying please try to impress us into buying new aircraft of this size and range or we're just going to shrink our fleet. (And maybe just upgauge some key hub to hub routes to A350-900/1000s.)

And given that the responses to all 3 of the above questions is likely be along the lines of "We have no such plans."
MROs and parts suppliers: We've got fleets of A319/320 CEOs, B-737NGs, and B-757s that we intend to keep flying until at least 2030 and maybe longer, so you can count on our business up to, and perhaps beyond, 2030, so please don't be closing up shop before then, because you'll have a loyal customer in Delta. Well, unless you increase your prices, because if you do that, we're going to just immediately exercise our option to buy 100 new A320s and cancel our contracts with you. But otherwise, it's nice doing business with you.



AS the 717 is newer redesign between the 737NG & Max using this "And they still plan to operate MD95s (B-717s) until roughly 2025." Along with the MD88.90 retirements is like saying they operate 737NG in that same non newer idealism. The 717 is not just a DC-9 any ore than a 737 Max is a 737-100.
 
tsra
Posts: 221
Joined: Tue Feb 06, 2007 3:04 am

Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 5:55 pm

F9Animal wrote:
WidebodyPTV wrote:
luckyone wrote:

That extra inch of width is absolutely amazing.


So to speak...

[quote="LAX772LR wrote:
F9Animal wrote:
I am almost certain Delta is still steaming pissed at Boeing

Corporations aren't sorority mean-girls.... you're ascribing emotion to what is, and always will be, a numbers/value/equity-based response.

Whomever presents the the greatest overall value, will be the winner.[/quote]

Absolutely. One can not run a business with emotions.
 
Tiredofhumanity
Posts: 168
Joined: Sat Sep 19, 2020 9:27 pm

Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 5:57 pm

rbavfan wrote:
ifIHadWings wrote:
As I recall, Delta made a deal with P&W to be an MRO for the P&W geared turbofan engines on the A220s and A320 NEOs, but couldn't get a similar deal with CFM for the engines used on the B-737Max. As such, it would seem Delta is highly likely to buy A320NEO aircraft instead of B-737Max for the remainder of this decade unless CFM changes their mind about engine maintenance contracts. It seems to me this shouldn't be so much a Boeing vs. Airbus discussion, as a CFM vs P&W discussion. Since P&W engines are only pared with the A220 and A320 families and not with the B-737Max, that seems to limit what Delta is likely to buy for now.

Also, in their Apr 22, 2021 press release, Delta said "Delta’s total purchase commitment for the A321neo will now be 125 firm aircraft, with 100 purchase rights." As such, with 100 existing options for the A321, they definitely have room to grow their A320 family order in the coming years if they want/need to add some incremental aircraft. Also, I don't see Delta wanting to add a new fleet type (i.e. B-737Max) unless they have a need for something like 75-100 new planes AND they can get CFM to make a deal. Sure, one group of pilots could be used with both the B-737Max and B-737NG, but there would still be extra incremental/difference training. Plus spare parts to buy, and the like. They'd be better off just converting some of their 100 options on A321s rather than adding a new sub-fleet.

Also, in their Apr 22, 2021 press release, Delta said (emphasis mine) "The new aircraft [A321neos] will be deployed primarily across Delta’s extensive domestic network." I don't think Delta is worried about planes with A321XLR type range at the moment. I think they are planning for planes with enough range to fly ATL-SEA, but that are also good (and cheap/light) enough to fly routes like ATL-MCO. Delta doesn't want to pay extra for heavier planes that have excess range compared to their needs.

Also, for those thinking Delta might care about only buying modern, fly-by-wire aircraft, keep in mind we are discussing the company that just last year retired their MD88 and MD90 fleets. And they still plan to operate MD95s (B-717s) until roughly 2025. Delta cares about high dispatch reliability, minimizing debt, maximizing their credit rating, cost of operation, being able to buy replacement parts, and the like. I really don't think they care if their fleet is "modern."

Realistically, I would GUESS this is what Delta is telling their suppliers:
Boeing: What are your plans for a 150-200 seat Yellowstone-1/NSA/737 replacement for delivery starting in about 2029-2031, give or take? We'll be in the market for some planes of that size then; either some NSAs or heavily discounted, last off the line, B-737Maxes.

Airbus: Got any plans to not only launch the A220-500 (at a price and with a seat count and range that is to our liking), while also funding and building a final assembly line for those planes in the USA so we can avoid import duties? If so, let's talk about some possible orders with deliveries starting in either the 2025 or 2030 time frame (assuming you also are going to do a nice efficiency upgrade on the A220 program by 2030).

Airbus and Boeing: Got any plans to launch and start delivery, in 2025 or so, of something with more seats and a longer range than an A321XLR but also with fewer seats, a shorter range, and a lower per-seat cost (for both in terms of initial acquisition cost and long term operational cost) than a B-787-8 or an A330-800? We're expecting to run out of B-767-300ERs around then and might want to keep flying routes of similar distance and with similar passenger demand. Or we might just give up on operating those routes and just hope our customers will agree to fly to partner hubs in Europe, Asia, and S. America on larger aircraft and accept an extra connection. Or maybe international flying won't have recovered by then and we will just shrink. So really, we're saying please try to impress us into buying new aircraft of this size and range or we're just going to shrink our fleet. (And maybe just upgauge some key hub to hub routes to A350-900/1000s.)

And given that the responses to all 3 of the above questions is likely be along the lines of "We have no such plans."
MROs and parts suppliers: We've got fleets of A319/320 CEOs, B-737NGs, and B-757s that we intend to keep flying until at least 2030 and maybe longer, so you can count on our business up to, and perhaps beyond, 2030, so please don't be closing up shop before then, because you'll have a loyal customer in Delta. Well, unless you increase your prices, because if you do that, we're going to just immediately exercise our option to buy 100 new A320s and cancel our contracts with you. But otherwise, it's nice doing business with you.



AS the 717 is newer redesign between the 737NG & Max using this "And they still plan to operate MD95s (B-717s) until roughly 2025." Along with the MD88.90 retirements is like saying they operate 737NG in that same non newer idealism. The 717 is not just a DC-9 any ore than a 737 Max is a 737-100.


:confused:

I thought both the NG and 717 were from the late 90's?
 
Lootess
Posts: 908
Joined: Sun May 13, 2018 6:15 am

Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 6:06 pm

tsra wrote:
F9Animal wrote:
WidebodyPTV wrote:


So to speak...

[quote="LAX772LR wrote:
F9Animal wrote:
I am almost certain Delta is still steaming pissed at Boeing

Corporations aren't sorority mean-girls.... you're ascribing emotion to what is, and always will be, a numbers/value/equity-based response.

Whomever presents the the greatest overall value, will be the winner.

Absolutely. One can not run a business with emotions.


Ed talked up Boeing during CES last year, and he was adamant about wanting to launch the NMA. Which says a whole lot.

It's not hard to tell they were eye balling this plane on-paper for growth and replacing the long-haul 757 Delta One and last of the 763ERs. The A321 is not that plane, and the A339 is too large. But with the 2025 clock rolling, it's going to be an interesting few years.
 
jbs2886
Posts: 4710
Joined: Wed Apr 01, 2015 9:07 pm

Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 6:39 pm

LAX772LR wrote:
astuteman wrote:
LAX772LR wrote:
Corporations aren't sorority mean-girls.... you're ascribing emotion to what is, and always will be, a numbers/value/equity-based response.

Whomever presents the the greatest overall value, will be the winner.

I don't disagree that corporations will try to be objective.
However, there is little doubt that if the value propositions are close, the working relationship WILL come into play.

Agreed, though that's why "value" was mentioned, instead of simply price or cost; because the working relationship is absolutely a component of the value proposition.

And despite AvGeeks' attestation to the contrary, no one here really knows the true and current nature of Delta-Boeing's working relationship.

It's just like when A.netters swore AA would never buy another Airbus after AA587, only for it to bounce back with the largest unit purchase from Airbus of any airline in history.


Exactly - relationships are important, but numbers tend to control things. Moreover, corporations sue each other way more than you think. Does it cause some bad blood? Sure. But they get over that fast if they can financially benefit on the next thing.
 
User avatar
Revelation
Posts: 28201
Joined: Wed Feb 09, 2005 9:37 pm

Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 7:09 pm

mjoelnir wrote:
The A220 issue is not connected to the dispute between the USA and the EU. It is connected to the USA laws allowing USA companies to sell products below the production cost, but not a foreign company.

Right, but it's now a resolved issue, unlike the broader airliner tariff issue, which is hopefully resolved soon.

mjoelnir wrote:
Boeing allowing a manufacturing change unchecked in regards to the consequences of the grounding of necessary equipment, shows again how far from normal and safe engineering practices Boeing operates.

"Unchecked" and "insufficiently checked" are not the same thing.

mjoelnir wrote:
But it is OK to be beholden to one manufacturer if you happen to have a Boeing fleet.

Your words, not mine.

Single vendor fleet works fine for FR, WN, WS, NK, U2, others.

Mixed vendor works fine for others.

One size does not fit all.

mjoelnir wrote:
I think Delta will get the licence to work on the LEAP, I see no reason why CFM/Safran should refuse them. Lufthansa did get the licence while flying the P&W only on their A320neo family frames. No 737MAX on order at Lufthansa.

I hope you are right.
 
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lightsaber
Moderator
Posts: 24469
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Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 8:32 pm

MIflyer12 wrote:
lightsaber wrote:
Oh, Delta debt is an issue...


I would really like to see you outline your reasoning for that.

DL ended 1Q21 with $31.6 Billion in long term debt (and $14.2 Billion in cash and short-term investments; no available liquidity nonsense)

UA ended 1Q21 with $32.6 Billion in LT debt and $13.2 billion cash/short term investments (and a mainline fleet that is, on avg, 2.3 years older than Delta's).

AA ended 1Q21 with $44.0 Billion in LT debt and $14.9 Billion in cash/short term investments.

https://www.marketwatch.com/investing/s ... et/quarter

.

We're talking aircraft purchases. DL worked for years to burn down debt before buying. Since we would be talking about another hundred aircraft, it is my opinion that DL's current debt will slow aircraft purchases.

Leeham is predicting:

Airline demand recovery is prolonged in most regions; new tax and cost pressures loom.
Debt loads will continue to grow this year; interest expense is mounting.
High leverage may depress airline capital expenditures through 2030.

https://leehamnews.com/2021/04/22/unsus ... suppliers/

I am not predicting any big aircraft purchases by US airlines until debt is reduced. In fact, this order is a nice surprise.

The reality is, the ULCCs seem to have the customers for growth. This is less about the network carriers but who will, in my opinion grow.

DL must, as they did before, slow aircraft purchases to preserve cash.

Lightsaber
 
WidebodyPTV
Posts: 1005
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Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 9:55 pm

Lootess wrote:
Ed talked up Boeing during CES last year, and he was adamant about wanting to launch the NMA. Which says a whole lot.


No, Bastain didn't talk up the NMA; he said that (and I'm paraphrasing and consolidating multiple comments) he thinks Boeing should've developed the NMA to begin with, instead of chasing the MAX. The problem is that Boeing DID choose to pursue the MAX; development of the NMA could take a decade or longer to yield an aircraft whose performance isn't much better than an NEO / a third generation 320. And no, DL isn't holding out for the NMA -- again, no reasonable business would bet its future on an aircraft that does not exist and may not exist for some time. The window for the NMA to replace the (largely) early 2000s build aircraft is quickly closing; unless DL chooses to source late-model second-hand CEO and 737NG, then the NEO and MAX will be the contenders.

It's not hard to tell they were eye balling this plane on-paper for growth and replacing the long-haul 757 Delta One and last of the 763ERs. The A321 is not that plane, and the A339 is too large. But with the 2025 clock rolling, it's going to be an interesting few years.


DL is explicit that its labor costs make the economics of long-haul low-density aircraft challenging (and I doubt the improved economics of the NMA would offset this much). Hence why, even pre-COVID, there's fewer long-haul 757 flights and why the 339 was the primary de facto 763 replacement. Pre-COVID, DL was to receive nearly A339/A359 over a five year period. No, they weren't planning the largest long-haul expansion in history -- these planes were primarily replacing the 763; various pilot forums had long been relaying that DL was shopping around its youngest 763 to freight operators. Of course, most of these jets were acquired to operate within the domestic system, but found themselves performing long-haul after DL lost a ton of money (at the time) flying them back-and-forth e.g. ATL / Florida.
 
ewt340
Posts: 1593
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Re: Delta Orders Another 25 A321 NEO + 25 Options

Mon Apr 26, 2021 10:22 pm

DL220MSP wrote:
WayexTDI wrote:
ewt340 wrote:
In comparison, American Airlines operate 218 A321-200 and they ordered 120 A321neo/XLR. Delta's order seems miniscule compared to AA's A321.

They didn't order the MAX yet, nor do they order A320neo. Maybe they are heading for A220 + A321 combo in the future for their domestic operations.

DL's 125 A321neos vs AA's 120 A321neos is minuscule??? I guess I don't understand math


He seems to have forgotten Deltas116 A321CEOs...


No, currently AA have 250 A321s. With 88 more on orders. This bring their total to 338 A321s.
Delta only have 116 A321s in their fleet. With 136 on orders. Even with all that, there would only be 252 A321s in their fleet after all the delivery is done.
This extra order isn't all that surprising considering one of Delta's largest competitor operate 250 A321s in their fleet.

And since they haven't order any A319neo, A320neo or any MAXes. It seems like there's a possibility that they want to utilize A220 + A321 combo in the future for their narrowbody operation.
 
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seahawk
Posts: 10432
Joined: Fri May 27, 2005 1:29 am

Re: Delta Orders Another 25 A321 NEO + 25 Options

Tue Apr 27, 2021 5:27 am

mjoelnir wrote:
I think Delta will get the licence to work on the LEAP, I see no reason why CFM/Safran should refuse them. Lufthansa did get the licence while flying the P&W only on their A320neo family frames. No 737MAX on order at Lufthansa.


Lufthansa ordered both engine options on the A320NEO.

https://www.lufthansagroup.com/de/theme ... erung.html
 
mjoelnir
Posts: 9833
Joined: Sun Feb 03, 2013 11:06 pm

Re: Delta Orders Another 25 A321 NEO + 25 Options

Tue Apr 27, 2021 8:31 am

seahawk wrote:
mjoelnir wrote:
I think Delta will get the licence to work on the LEAP, I see no reason why CFM/Safran should refuse them. Lufthansa did get the licence while flying the P&W only on their A320neo family frames. No 737MAX on order at Lufthansa.


Lufthansa ordered both engine options on the A320NEO.

https://www.lufthansagroup.com/de/theme ... erung.html


But Lufthansa have not taking delivery of frames with the CFM/Safran LEAP. So they are only flying P&W engines on the neo.

But you have still not explained, why Delta need to buy 737MAX to get CFM/Safran LEAP engine contracts.

As the current sales are going, there will be more A320neo family frames with CFM/Safran LEAP engines being sold than all the 737MAX together.
 
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seahawk
Posts: 10432
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Re: Delta Orders Another 25 A321 NEO + 25 Options

Tue Apr 27, 2021 8:57 am

They do not need to buy the MAX, but maybe Boeing would be pressuring CFM to grant a licence if DL would buy the MAX. For the NEOs CFM and DL did not reach an agreement and Airbus has no incentive to pressure CFM, as they would be working against PW in that case, which would not be in their own interest.

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