Here is a story we did for Commercial Aviation Online:
|Commercial Aviation Online
Delta Air Lines’ order for 100 Boeing 737-900ERs is a major boost to this model, but does nothing to add to the 737 re-engine programme.
The airline’s original request for proposals, issued early this year, came well before Boeing decided to go forward with the 737 re-engine and accordingly, the airplane was not included in any proposal from Boeing to Delta or in any analysis after American Airlines placed the launch order in July.
While there had been some expectation among Wall Street analysts that Delta would at the least have conversion rights in the contract to allow some deliveries in the 2017-2018 period of the 737 re-engine, CAO has confirmed with two sources that there is no provision. Delta would be taking too few airplanes in this period to be allocated valuable launch customer/launch operator delivery slots, according to one person familiar with the situation. Although American provisionally ordered 100 737REs, it does not want to be the launch operator and has slated first deliveries in 2018.
Boeing needs a substantial launch operator before the board of directors will authorise launch of the programme. The board is expected to approve authority to offer (ATO) at its meeting Monday.
Southwest Airlines and Boeing are in negotiations for a launch order with launch operator status. Southwest previously was the launch customer and launch operator for the 737-300, -500 and -700.
Credit Suisse’s aerospace analysts, in a note issued 25 August, believe the Boeing board will authorise launch of the 737 re-engine at its October meeting, following a commitment by Southwest.
Credit Suisse, and CAO’s sources, said one of the factors that tipped the Delta order to Boeing was the availability of production slots vis-à-vis the Airbus A321. Delta wants all the airplanes delivered by 2018, a requirement Airbus could not meet, it was believed, without massive overbooking its delivery positions and the risk that either the skyline could not be moved around sufficiently or production could not be ramped up.
“Airbus has racked up 995 net orders YTD (96% narrowbody), well ahead of Boeing’s 276 (62% narrowbody),” Credit Suisse wrote in its 25 August note. “To date, the 737-900 model has not sold particularly well and represents just 10% of 737 backlog. Airbus’ narrowbody backlog is 1.4x Boeing’s, so delivery availability was likely key.”