Delta orders Airbus–a look back at the history between the two companies

Delta Air Lines announced an order today for 30 A321ceos and 10 A330-300 HGW. This is the first Airbus order from Delta in two decades; the only previous order was for nine A310-300s during the days of CEO Ron Allen. Allen ordered these aircraft shortly after acquiring A310-200s/300s when Delta bought part of the failing Pan Am.

But when the 1991 Gulf War happened and the US airline industry went into a tail-spin, Allen undertook a cost-cutting procedure that eliminated all A310s from the fleet, including the new orders–before all nine had even been delivered.

Delta subsequently was one of three US airlines to sign a 20-year exclusive supplier agreement with Boeing; American Airlines and Continental Airlines were the other two. But when, in 1997, Boeing and McDonnell Douglas proposed merging, the European Union demanded that the exclusive supplier agreements be voided. Boeing agreed not to enforce them. Still, Delta did not order Airbus until now.

But the current Delta management, led by Richard Anderson,* once ran Northwest Airlines. This management took over Delta upon its exit from bankruptcy following 9/11 turmoil that decimated the US airline industry. Anderson and his team ordered from both Airbus and Boeing while running Northwest, preferring to maintain a dual-source supply of airplanes. Anderson’s Delta previously ordered 100 Boeing 737-900ERs.

Delta is one of the few airlines that has yet to order the re-engined Airbus or Boeing single-aisle airplanes. The philosophy is that it wants to see the new technology in action before signing on. Northwest Airlines was the US launch customer for the Boeing 787, an order placed after Anderson’s team left NWA. Delta inherited this order when NWA was acquired, but Anderson’s team didn’t like what was happening with the 787-8 program and deferred the 787 order to at least 2020, according to the data base Ascend. Many think Delta may never take the 787, but this remains to be seen.

Delta came very close to ordering the Bombardier CSeries, but its caution against new technology and a worsening economy at the time killed the order for the time being.

  • We recently resumed doing an email-only newsletter after a hiatus of several years. In the one issued Tuesday, we discussed the implications of the first flight of the Boeing 787-9. The Wichita Eagle wrote this article based on the newsletter.
  • *A reader pointed out we originally wrote “Ron Anderson.” Ron Anderson is another figure in aviation we know, who once worked for FedEx and was the founder of Intrepid Aviation . Thanks for the correction.

67 Comments on “Delta orders Airbus–a look back at the history between the two companies

  1. Congrats to Airbus & DL for this order! I’m sure both manufacturers are giving good deals to “entice” carriers to keep the production line smooth for both the NG and CEO’s. Nice to see carriers taking advantage of it.

    With DL postponing their B787 order (I don’t think they will cancel) and with many of the “kinks” of the B787 being worked out, I wonder if they will regret it. Regardless, the A330 is an excellent plane and will do quite well for DL.

  2. I think I saw this as a rumour on a.net a good few months ago. Made perfect sense to me then and still does, given their current fleet of plenty of (NW heritage) A32S and (NW heritage) A330s. Seems like a good way of refreshing their fleet to a point and increasing capacity as well, while not adding any new technology/types.

    • Yes and that thread is a really fun read right now, if you’ve got free time to see how wrong people can be in hindsight :D

      • Must check that out when I get a chance. Watching a.net certainties/myths getting busted is usually quite entertaining. :-)

  3. But, but, but Delta wasn’t supposed to order Airbuses!
    And AA too!
    And United after its merger with CO should have canceled those A350s already.
    What’s the world coming to?
    It must be freezing in hell today!

    • Why not, free lunch subsidized by the European people (overtaxed by their socialist governments)?

      • Those European socialists are at it again!
        Clearly the only way for a private carrier to order Airbuses over Boeings is to get bribed by those EU Marxists or to get the planes for free!
        We should all write to our congressmen and ask them to bomb Toulouse instead of Syria!

      • And…the USA giving away $12 Trillion to Banks and Corporations under a Republican administrations is….Capitalist? I don’t think so. When it comes to Corporate Welfare, the good ole’ USA is as Socialist as they get.

    • That’s total utter tosh. Only irrational and/or childish people make that comment. We know a carrier is going to order the plane which fits a number of criteria. To top it off, DL has a huge number of Airbus single-isle and widebodies.

  4. The A321 seems to have become the star in Airbus’ NB portfolio recently. It is significantly bigger than the competing 737-9(00), cargo container/ pallet capable, sporting wider cabins for longer flights and has superior payload and runway performance. While sharing the flight deck and support infrastructure with the 5000 A320s around.

    Runway performance is relevant for Caribbean and South America networks, short hot runways with high loads, where 757/767s have to be replaced.

    The writing has been on the wall (and also at Leeham) for years and nobody should be surprised if UA, US and other US operators get A321 (Alabama) slots soon, next to AA & DL. It doesn’t fully replace the 757, A300/310, Tu154 and 767-200, but seems the next best option. A 787-8 or A330-200 is twice as big and expensive.

  5. This is bizarre. Why didn’t Boeing make DL an offer they can’t refuse to keep them as a customer. I thought DL would never order Airbus and certainly not the A321 because there isn’t a pilot pay scale yet.
    Or Airbus not only gave them the planes for free but also threw in a night out dancing with John Leahy just to close the deal!
    Maybe DL just ordered Airbus because they hate the 764. Someone should sue them for defamation.

    But seriously, it’s nice to see this order and to see DL ordering Airbus. The biggest surprise here is DL going GE for the 333s. My money was on RR. The only thing I can think of is commonality with its JV partners AF/KL/AZ, though I’m not sure why they’d want to do that.

    • It could be Boeing has possible other commitments and or possible other carriers lined up for possibly better pricing? Could be Airbus gave DL a good offer (doesn’t have to be $$$ could be slots, m/x, etc.)

      • They would have had to make a pretty good offer to DL for sure behause they can’t seem to shift those A330s and A321s otherwise.
        Oh, wait…

  6. DL needs to begin replacing their aging A-319s and A-320s, plus some of the oldest B-757s. The B-737-900ER order did some of this, and the A-321 will do some, as will the B-717s. Many of the A-319s do not need replacement yet. DL has said they intend to hold onto the MD-88s and MD-90s for a while longer.
    DL also has some of the oldest B-767-300s (non-ER and ER) which need to be replaced. The A-333s are probable going to replace these. But if that is true, I wonder why DL didn’t order 10 new build B-767-300ERs or B-767-400ERs?

    • It must have been that dastardly John Leahy who hypnotized Delta’s board into ordering Airbuses instead of Boeings.
      Something must be done about it!
      I think we should write to our congressmen!

      • Leahy probably offered Ms. Merkel to lapdance UA if they didn’t sign the contract ;-)

    • The A-333s are probable going to replace these. But if that is true, I wonder why DL didn’t order 10 new build B-767-300ERs or B-767-400ERs?

      Beides the obvious reasons for not ordering the 764 in particular, your premise is incorrect: According to DL, the new A333 are for growth, not for replacing other planes.

  7. They not being offered anymore? Neither is in Boeing’s pricelist in its latest revision.

  8. The 767 and A320 are/ will be retrofitted in the DL fleet. I think Airbus upped service live of the A320 to 120.000 hrs and is working on a 180.000 hrs program. That is an incredible amount of flights (3000-4000 hrs/yr) No NW DC9 ever came close.
    I remember NWA started up JV DTW-AMS hub-hub A333 operations a decade ago, loadfactors 80-90%, 4 return flights a day/7 days aweek, full cargo belly’s, unbeatable.

    • keesje, I doubt an A-320 or B-737, as a fleet could reach 120,000 hours, let alone 180,000. Most NB aircraft only fly 2-2.5 hour legs their entire career, that is 48,000 to 60,000 cycles for a 120,000 hour life. While most can reach 50,000 cycles the flying hours rarely go above 100,000 for NB airplanes.

      It is common for WBs to reach those flying hour milestones because they fly longer legs. For example, LH is retiring the B-747-400s at about 120,000 hours, but they have only about 25,000 to 30,000 cycles.

      You may remember Aloha-243, a 19 or 20 year old B-737-200 that lost a significant portion of the fuselage over the passenger compartment back in 1988 in Hawaii. That airplane had a relatively low number of flying hours for its age, but had a very high number of cycles, corrosion also played a part in that accident.

      Corporate, Business, BBJ, and CJ aircraft can reach those flying hour milestones, if they fly many fewer cycles.

  9. Has anybody noticed the A330 delivery schedule in this deal?

    It sounds like a firesale to me. Or perhaps it is a recycled order. I mean somebody will cancel some A330 orders. Perhaps Kingfisher?

    http://news.delta.com/index.php?s=43&item=2095
    Airbus A330-300
    The 10 A330-300 aircraft will augment Delta’s existing fleet of 32 A330s. The first A330 delivery is scheduled for spring of 2015, with three additional airplanes scheduled for that year, four in 2016, and the final two in 2017.

    • Its clearly a give away instigated by some Marxist Leninist bureaucrat from Brussels!

  10. It seems to me there is always “it must have been be real cheap” when Airbus steals a significant order. Never any substance. Maybe its no more then a knee jerk feel good reaction to avoid suggestions A might offer a better product. Just dirty money..

    No Vero Venia, 10 machines 2015-2017 doesn’t sound like a firesale at all. They have A330s, they obviously like them and bought some more. Maybe they’ll order 777 too later on. Deferring the 787s proved much wiser then sticking with deliveries from 2008 as most airlines did.

    Do you have any clue of a recycled A330 order? Or the usual anti A suggestions quoting yourself?

    The choice for CF6-80E1 is remarkable IMO. The 787 had RR engines and the current A330s have Pratts..

  11. For what purpose did Delta ordered the HGW variant? How big is the price difference between the “normal” -300 and the -300HGW? Range is about the same as 767-200ER. What will the HGW replace?

  12. Has VV Noted, that Airbus has less than 300 A330 orders in his books, and with a 10 A/C month 110 / Year production , the FAL may have delivered the whole bak log by mid 2016 !
    And Kingfisher order may have been recyled at least three times now , following rumors!
    Unlimited bad faith from an ex Airbus employee …. !

    • Rensim said, “Has VV Noted, that Airbus has less than 300 A330 orders in his books, and with a 10 A/C month 110 / Year production , the FAL may have delivered the whole bak log by mid 2016 !

      That’s a very interesting comment. How many A330 have been delivered so far this year?
      Does the 300 backlog include 15 Kingfisher’s orders?

      • Both questions can be easily answered by looking at the Orders and Deliveries spreadsheet available on the Airbus website.

  13. 100x 737-900ER, 88 Cheap used 717s on lease, the fancy upgraded 767s, cargo packed Pacific 744s, paid for 15 yrs ago DC-9s, 60 Unpopular/cheap but efficient MD90s. 100 MD88 getting glass cockpit next year.

    The, listen to nobody, savvy, unglamorous Northwest fleet strategy is now Delta’s. You’ll never know where they’ll go but they usually outsmart the industry.

    Ex-TWA/American Boeing 757-231 N717TW (msn 28485) now with Delta Air Lines and Blended Winglets. 2009 SkyTeam color scheme, flights to Europe.
    http://tasreports.files.wordpress.com/2009/10/n717tw-delta-b757-200.jpg

  14. The did get the Airbus quite cheap. But who doesn’t? Airbus needs to sell off its remaining CEO production. Boeing doesn’t exactly achieve premium prices on its NG, either. I would assume that DL wants to diversify. As they already operate the bus, there is no additional cost associated. The opposite is true, changing back to an all Boeing fleet would see many investments (such as maintenance equipment, simulators and people knowledge) becoming useless.

    • The current marketshare, lost competitions, aircraft specs, aggressive financing initiatives, time to market, airline conversion costs, market outlook and competitive pressure would not support an assessment Boeing is able to command a premium in NB sales campaigns with their 737 MAX offerings at this moment in time.
      http://www.pdxlight.com/neomax.htm

      I would not be suprized if Boeing is working on an accelerated plan B behind the curtains and w’ll hear more on it in the next 2 years after a few more high profile defections.

  15. I wonder if D’s ownership of an oil refinery makes them willing to buy “old tech” planes that are significantly less efficient than newer ones. That investment seems to need work.

    http://centreforaviation.com/analysis/delta-air-lines-oil-refinery-investment-losses-concern-sceptical-investors-and-observers-119749

    Also, are these purchases or leases, like for five or ten years?

    I liked Anderson’s use of “opportunistic” to describe these orders. To ,me that means low price, which I do not say as a criticism of A, but as a statement of the reality in which they and B are trying to sell planes like these. From Anderson’s viewpoint , it sounds like he is as afraid of capital costs as he is of fuel price increases.

  16. “I liked Anderson’s use of “opportunistic” to describe these orders.”
    He has been doing that for at least 5 yrs (when I cut & pasted this)
    http://farm3.static.flickr.com/2635/3962844514_3807d53f5f.jpg

    “To ,me that means low price”
    I think it is remarkable everyone saw Boeing 100 737-900ERs for Delta as a great win for Boeing and a proof of the aircrafts viability.
    Now Airbus wins 30 A321s, the main focus is on how deep discounted they must have been. Great stuff ;)

  17. “Now Airbus wins 30 A321s, the main focus is on how deep discounted they must have been. Great stuff.”

    Keesje, I think you are being a little thin skinned. Everyone knows both OEMs are hungry to sell 320 non-neos and 737NGs to keep their lines alive until delivery of the NEO and MAX, particularly B which won’t deliver the first MAX until 2017. So, no surprise that prices are low. Re the 330s, D is the first buyer of the enhanced version, and obviously wants it, but since they are the “launch customer light” one would expect that they got a great deal.

    • DL is not the first buyer of the 242t MTOW version, that was SAS. However, DL might be the first to receive it.

  18. TO : VV !
    67 A330 delivered this year, including MRTT hulls !
    The Kingfisher A330 slot’s, and the others A320’s, have been , may be unofficially, re-attributed, times ago !
    Nobody thinks seriously they will take them any time soon , unlike somebody buy out Kingfisher ashes !

    • Rensim,

      Are you insinuating that the 5 A380 ordered by Kingfisher are already re-attributed to someone else too?

      • Bad faith as usual VV !
        I didn’t say nothing concerning the A380 !

        But I think, Doric at least, and may be others customers like Skymark, may get earlier spots !

        Sure, Airbus has not waited for a doubtfull Kingfisher resurection to allow them !

      • You are trying pretty hard in your job.

        To wit: you are munging production slot and order book entries
        ( and try to make them stand in for another assertion.

        Production slot are rearranged all the time.

        Items in the order book exist as long as the prerequisites exist
        and no valid cancelation has been effected.
        The orderbook is a bookkeeping item and not an estimation
        of future prospects positive or negativ.

        My guess is you know this but still try to misuse it for your purposes.

        • Production slots are L/Ns and or C/Ns for a specific customer. Yes, they can be reassigned with the cooperation of the customer. Production slots are primarily assigned because of the contracted delivery date to the customer. But different options, like different engine makes, etc. can also affect production slots. A production slot that has RR engines on order for it cannot easily be reassigned to a customer who ordered GE engines. But in either case the new customer has to be in a position to be able to accept an earlier slot, and of course make the delivery payment.
          But this may be one factor of the OEMs deciding on only one engine make for their latest and newest products, like the A-350, B-737NG/MAX, B-747-8, B-777-300ER/-200LR/-200LRF/-8X/-9X, CS-100/-300, etc. Yes, there still are types that are still offered with more than one engine make.

  19. “Keesje, I think you are being a little thin skinned. Everyone knows both OEMs are hungry to sell 320 non-neos and 737NGs to keep their lines alive until delivery of the NEO and MAX, particularly B which won’t deliver the first MAX until 2017. So, no surprise that prices are low.”

    Really? Everyone knows? Got any evidence?

    Also, how can you possibly know any of these planes have been sold at deep discounts? Got any proof?

    • The truth is, as of right now, few if anyone knows why DL made this particular purchase.

  20. Scott,
    I assume that your e-mail only newsletter is only for paying customers (we all gotta eat, right). Is there any chance that you will eventually do a blog entry based on some of the info in the newsletter? The info on the 787-9 lessons learned that was quoted in the Wichita Eagle was new (at least to me), and I would be very interested in hearing more of your take on it.

  21. VV: “Has anybody noticed the A330 delivery schedule in this deal?
    It sounds like a firesale to me. Or perhaps it is a recycled order. I mean somebody will cancel some A330 orders. Perhaps Kingfisher?”

    You know that’s what happens when you see 2 and 2 in front of you but arrive at a sum of 5 because you think that it must be right.
    DL requested 2015 delivery, a prerequisite for the order. Airbus managed to get them the slots. No firesale, sorry to disappoint. Also:
    – some delivery positions change about 18 months prior to delivery, it should not be a surprise to you.
    – no cancellations so far this year for the A330.

    Why such fixation with Kingfisher? The orders are in the backlog but that does not mean that a delivery position had been assigned to them as this would require to have a PDP plan. As you know they are in no position to pay for anything.

    • Don’t waste your words on VeroVenia. He’s an expert at seeing what he wants to see, you only have to read his blog to see this. You’re better off ignoring him and leaving him to sprout his nonsense and believe whatever he wants.

      • Sighhhh, unfortunately I am very well familiar with VV’s views, not only from here and his blog but also the comments made on fleetbuzzeditorial. What an embarrassment of a site that was…

  22. Cubj3, not at all thin skinned. Here’s a summary of the press reactions on the 737-900ER order in 2011. Boeing just got a black eye from AA, burried the NSA and had to score a major US carrier. Still nobody was discussing discounts.
    http://travel.usatoday.com/flights/post/2011/08/delta-737-order/416690/1

    Looking at the A321/A330 deal the same press is stumbling over each other to stress deep discounts must have played a role. Not e.g. that the A321 is more capable then Boeings alternative, the A333 is everybodies favorite that cleaned the competings 772s clock and easily hold off the Dreamliner during the past 8 years and is only alternative for delivery before 2017. A firesale suggestion is far more comforting for the home public, stockholders and advertisers then e.g. Quality.

  23. “In purchasing 40 Airbus planes from aircraft families that have been in production for two decades, Anderson probably got a discount for Delta of “well over 50 percent” off the $5.6 billion list price, said Richard Aboulafia, vice president of the Teal Group.”

    http://seattletimes.com/html/boeingaerospace/2021755847_deltaairbusorderxml.html

    Not sure how the press is “stumbling over each other to stress deep discounts” in this case, with one quote from an analyst. Wasn’t there a comment above about how savvy the former Northwest executives are at fleet planning, how they listen to nobody, and they outsmart the industry? If this is all true then no one should be surprised by the possibility that they might have succeeded in getting a great deal. Airbus and Boeing both give good deals from time to time, it is not unheard of.

    • “Not sure how the press is “stumbling over each other to stress deep discounts” in this case”

      https://www.google.nl/search?q=discount+Delta+Airbus&rlz=1I7HPEA_nl&ie=UTF-8&oe=UTF-8&sourceid=ie7&gws_rd=cr&ei=drMpUtjmIoLAhAfA2YCYDQ

      Mike, what I am noticing is that Discount is on everybody’s lips, without any substance, while it was not a topic when the same airline ordered 737-900ERs.

      Playing down the aircraft as old, “not the hottest” “cheap” “bottom-feeder prices, current or end-of- production-life jets” (Aboulafia)

      E.g. Pilarski says Delta probably got a “phenomenally good deal” ignoring the A321 is the hottest deal around and Airbus had to free up slots in a yet to be build FAL, having the biggest backlog ever for A320s. Not consistent with simply a “phenomenally good deal” and presumed bargains for Delta.

      Simple truth is Airbus isn’t exactly desperate at this moment. Why then steep discounts? But that’s obviously not the preferred story line in main line press. Confirming pre-occupations sells better.

      • It is true that none of us knows what kind of deal Delta got. A case can be made on both sides of the argument. Regardless, you have still not convinced me that the press is doing something other that reporting it the way they see it. I suppose my perception could be inaccurate, but I don’t care either way whether or not Airbus or Boeing gives good deals.

      • Among the American airline industry’s chattering classes there seems to be a prevalence of beliefs that most, if not all Airbus deals with not only US customers, but international ones as well, have a higher discount level than what’s the case for Boeing deals.

      • If by chattering classes you mean commenters on this blog and others, then I would halfway agree. Since Boeing came up with the MAX, which was about when I started reading this blog, it is my perception that there are those on both sides that insist the other manufacturer must have utilized discounts to to entice customers to buy their inferior product.

        Even if Airbus deals do have a higher discount level on average, what is the big deal? Cost, performance, and time (availability) is a three legged stool. They are all important.

      • Yes, I would agree that some pundits perhaps are less one-sided than they were during the heydays of the “drug-like rush” of the 787, where everything Dreamlineresque was seemingly “analysed” as nothing short of brilliant, while the A380 and the also-ran A350 were looked upon by quite a few in the commentariat as not only late and “irrelevant” (A380) and an “also-ran” (A350), but also as being “illegally subsidized”. The prevalent view, at the time, seems to have been that the “heavily-subsidized” Airbus consortium always must have had to resort to heavy undercutting on price in order to win a deal, according to the beliefs of quite a few members of the chattering classes — presumably because Airbus’ products were inferior to the home made ones.

      • In the Seattle Times article I linked above, I still don’t see the tone you and keesje are claiming is there. There is really only the quote by Aboulafia that I copied above that stresses possible discounts. Then there are other places in the article that stress Delta’s fleet planning strategy (inherited from Northwest) as not using the latest and greatest and therefore, not having to pay as much. Perhaps the article is trying to connect the two, but that could be because there is a possibility that it is true (albeit perhaps small). At any rate, I would not call it falling over themselves.

        As I stated already, I guess I don’t see what the big deal is in good deals. Price performance, and availability are all important and one form of progress is being able to do and buy stuff for less money.

      • Well, I guess we see things differently then… however this
        “I don’t see what the big deal is in good deals”
        was never a point of contention. A good deal is a good deal that both parties are happy with. At least we agree there :-)

  24. kc135topboom: “But this may be one factor of the OEMs deciding on only one engine make for their latest and newest products, like the A-350, B-737NG/MAX, B-747-8, B-777-300ER/-200LR/-200LRF/-8X/-9X, CS-100/-300, etc. Yes, there still are types that are still offered with more than one engine make.”

    Maybe, but then again maybe not. Let’s add some background info to some of these models.
    A350: Airbus in on record as having wanted a second engine choice for the complete A350 lineup but GE hung onto their exclusivity contract with Boeing, while Boeing was planning on bidding out the engine supplier for the 777x. Rolls has an exclusivity contract for the -1000 but the -800 & -900 are not yet contractually limited to Rolls.
    Max: Boeing couldn’t offer a second engine choice due to design/cost/geometry constraints and while Boeing never publicly admitted to this, it isn’t exactly hard for people to discern this
    777: Boeing and GE cooked up the previous sole source contract to protect themselves financially. Since GE let RR lock them out of the A350-1000, and don’t seem interested in the other A350 models, it made sense for them to protect themselves for the 777x.
    C-Series: who knows what went on there? Maybe GE’s Leap didn’t look so good to Bombardier or maybe GE didn’t even show any interest in the C-Series or maybe something else completely.

    • There is another interesting facet to engine sourcing.
      NEO: for the GTF Airbus had been lobbying for an offer through IAE
      before they settled on the PW1000

  25. Apropos:
    I miss “availability” in the dissemination of the Delta buying decission.

    787 and A350 are effectively unavailable near term and thus do not
    provide a lever to reform a business model in the available timeframe.
    ( i.e. before another round of Chapter 11 could loom ahead.)

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