Dec. 4, 2017, © Leeham Co.: The Delta Air Lines management decision for an order for 100 Airbus A321neos or Boeing 737 MAXes, plus an equal number of options, is expected this week. A decision by the Board of Directors is expected next week.
Competition between the two companies was heated. Commercial terms were aggressive. Airbus and Boeing each want this deal badly. An Airbus win speaks for itself. For Boeing, a MAX order would give a boost to the MAX 10. A blocking move on Airbus is desired. For Boeing, a win would be especially meaningful.
Relations between Boeing and Delta are notoriously strained. These were exacerbated by Boeing’s complaint with the US government over the Bombardier C Series order, in which Boeing alleged price dumping and illegal subsidies. To no surprise, the Trump-led Department of Commerce found in favor of Boeing on both.
When Boeing filed the complaint, many—including this writer—believed Boeing’s complaint so angered Delta that it made a tilt toward Airbus a slam-dunk.
But the Delta CEO, and others within Delta, said there would be a fair and open competition. By all accounts, it has been, at least on the numbers.
The CEO said there were other factors to consider, too. The C Series issue, of course, is one of them. So is, I’m told, a bit of a public relations issue. Delta is building up a big hub in Seattle in competition with home-town airline Alaska.
Seattle is also the home town for Boeing Commercial Airplanes and production of the 737. There is at least some concern an Airbus selection might cause some bad publicity and passenger avoidance.
(This might be mitigated by the fact Alaska will be operating Airbus A320s and A321s for at least the next 7-12 years because of its acquisition of Virgin America. Aircraft lease terms extend this long.)
Where does the Boeing trade complaint fall in all this?
This is a good question.
You can bet that if Boeing loses, the trade complaint will be pursued with vigor. But what happens if Boeing wins?
Did Boeing offer to drop the complaint as a carrot to win the deal?
Did Delta demand Boeing drop the complaint as a hammer to award the deal?
We may never know, but if Boeing wins and the trade complaint goes away, one can draw his own conclusions that there was a nexus.
“Since Boeing, in effect, is a one-company US industry, it controls whether the case goes forward or not,” says William Perry, a trade dispute attorney with the Seattle law firm of Harris Bricken. “If it withdraws the complaint, the case will end.”
If the anti-dumping and countervailing duties orders are issued, Boeing “can also inform the Commerce Department that it is no longer interested in the orders and the orders will end,” he told me.
“If there are more companies in the US industry, then it gets complicated, but in the Bombardier case, Boeing, as the sole US producer, drives the boat,” Perry said.
So this order is truly political, being truly Machiavellian is it in the interest of Airbus to forego 100 A321neos for this whole nonsense to go away? Seems a bit of a high price to me. Further I understood that BBD were effectively being held in contempt by the investigating team, is it within the right of Boeing to remove the complaint given it has been elevated to Federal level.
Regarding: ” I understood that BBD were effectively being held in contempt by the investigating team, is it within the right of Boeing to remove the complaint given it has been elevated to Federal level.”
The Commerce Department’s authority is limited to trade cases and other regulations administered by the Commerce Department, it cannot charge people or corporations with criminal contempt as a state or federal judge can.
In US trade cases, and in US civil and administrative proceedings in general, you have the opportunity to present a case defending yourself against any complaint made against you, but you are not forced to do so. If you chose to not co-operate in a case against you, the case goes on without you. This is what happened to Bombardier in the anti-dumping case after Commerce felt that after multiple clarifications and deadline extensions Bombardier had failed to respond satisfactorily to the main case questionnaire. Bombardier’s sole punishment is that Commerce gave up on getting the requested information from Bombardier, and decided the anti-dumping case (not the CVD/subsidy case) on the information that had been entered in the case record, i.e. mostly the information submitted by Boeing , If the case ends, because Boeing retracts their complaint, or for any other reason, the “punishment” goes away with the case.
Following are some excerpts from the Application of Adverse Facts Memorandum in Anti-Dumping case which details Commerce’s assertion that Bombardier was not co-operating in the case. The full document may be found on the USITA website if you set up a account for and log into the “ACCESS” system. If you don’t like what you read, please send your complaints to Commerce, or Bombardier’s legal team, not to me.
“Section 776(b) of the Act provides that the Department may use an adverse inference in applying the facts otherwise available when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. The Department finds that an adverse inference in selecting the facts available is warranted in this case because Bombardier failed to cooperate by not acting to the best of its ability to comply with a request for information.”
“Record evidence indicates that Bombardier has failed to cooperate by not acting to the best of its ability to comply with the Department’s requests for information. Specifically, the Department considers Bombardier’s failure to respond to portions of the section A questionnaire with information regarding its contract sales, and its failure to provide any of the information required by sections B, C, and D of the questionnaire as evidence that Bombardier did not put forth its maximum effort to provide the Department with full and complete answers to all inquiries in the instant investigation. Despite being instructed by the Department to respond to sections B and C of the Department’s questionnaire by providing information regarding its purchase agreements, Bombardier essentially refused to consider purchase agreements as a basis for reporting information required by these sections of the AD questionnaire. Rather than respond sections B and C of the Department’s questionnaire with the requested information regarding its purchase agreements, Bombardier claimed to be confused by these reporting requirements, even while it continued to argue that these purchase agreements are not the relevant transactions to be reported in response to those sections of the questionnaire. Instead of providing the information requested by the Department, with the exception of certain purchase agreements, Bombardier chose to only submit arguments without providing the information requested in sections B through D of the questionnaire. In fact, record evidence indicates that Bombardier failed to comply with unambiguous instructions contained in the Department’s AD Questionnaire. For example, the AD Questionnaire instructs respondents to repeat the question to which they are responding in their narrative submission and place their answer directly below it. The Department’s AD Questionnaire also instructs parties to respond to each question, and further instructs them that if a particular question does not apply, to state so and explain why in the questionnaire response. Bombardier failed to follow these instructions. This demonstrates that Bombardier failed to put forth its maximum effort in attempting to provide the information that the Department clearly stated it required to conduct the instant investigation. Even after the Department granted Bombardier extensions of the deadline to submit responses to various sections of the AD Questionnaire, Bombardier still only filed arguments, and factual information in support of its arguments, in lieu of responding to the questionnaire with the information requested by the Department. For the foregoing reasons, the Department preliminarily finds that Bombardier failed to cooperate by not acting to the best of its ability to comply with the Department’s requests for information, pursuant to section 776(b) of the Act, and, accordingly, the use of an adverse inference in selecting among facts available is warranted.
Selection of AFA Rate
Where the Department applies AFA because a respondent failed to cooperate by not acting to the best of its ability to comply with a request for information, section 776(b) of the Act and 19 CFR 351.308(c)(1) authorize the Department to base the AFA rate on information derived from the petition, a final determination, a previous administrative review, or other information placed on the record. In selecting a rate for AFA, the Department selects a rate that is sufficiently adverse to ensure that the uncooperative party does not obtain a more favorable result by failing to cooperate than if it had fully cooperated.
In selecting a rate based on AFA, the Department selects a rate that is sufficiently adverse to ensure that the uncooperative party does not obtain a more favorable result by failing to cooperate than if it had fully cooperated. The Department’s practice, in less-than-fair-value investigations, is to select, as an AFA rate, the higher of: (1) the highest dumping margin alleged in the petition, or (2) the highest calculated rate of any respondent in the investigation.
Consistent with the statute, court precedent, and its normal practice, the Department has assigned, as AFA, a rate of 79.82 percent to Bombardier. As noted above, this rate is the estimated dumping margin for aircraft from, and the only estimated dumping margin in, the Petition.”
Lesson, if you ever have an anti-dumping case filed against you and you don’t want the dumping margin in the complaint against you levied as
a duty, don’t forget to submit calculations and data supporting a lower margin, or no margin at all?
Good to see the Boeing Lawyers making their money.
Long winded explanatuons do not resolve the fact the case is bullying and politically motivated.
Boeing abandoned the sector with the end of 717 production.
This is outrageous bullying. Over 300% duty on any airframe simply has nothing to do with a reasonable response. I am stunned Boeing does not understand the damage to reputation
Depends on how Airbus views the future of its short A320 series compared to what may be a lighter more aerodynamic airplane, and its strategy to utilize its US production facilities. Hopefully not doing it just to tweak Boeing’s arrogant nose.
It will require more than a apology.
Another batch of $25m 737’s perhaps
And if this happens new deal of suits from the other side will come.
$25m 737MAXes will never happen !
My money is on Airbus with this one. I don’t think Boeing stands a chance … not at all.
Nope. Boeing’s hope of a deal with Delta dies with the C-Series debacle. Boeing only have themselves to blame for that one.
Also, Richard Anderson has already installed an anti-Boeing/pro-Airbus culture at Delta (defer/cancel 787; sniping at Boeing and trying to depress 777 values), so only way Boeing gets a win is if Airbus LETS Boeing win, and why would they do that?
Cash flow from 737s goes to 777-X develoment, Delta aren’t going to want BA to profit from this deal. Unless BA are willing to lose on it?
With Airbus taking over the c-series, of Beoing do win the order (and Boeing drops the suit), then Airbus kinda wins also. Especially if Delta comes back for more Airbus’ at a later date. They operate them widely right?
Otherwise, an Airbus win makes more sense in terms of comfort, cargo, transatlantic etc.
Magic eight-ball says… “Nobody knows what goes on behind closed doors”
Business decision would also the favorise Airbus A321neos with that motor it will be more economical in consumpsion then Boeing 737 MAX.
In my experience if DL (incl. NWAC) is expected to choose between “A” and “B”, they do “C” which best suits Their interests.
Pretty much agreed, I just don’t know where their interest is.
The A330/350 was one clear one, but the 737 orders have been a bit of a head scratcher all the other aspects aside.
And no cheap second hand A321s on the market, so I guess C is out?
I’d been assuming, possibly erroneously, that Boeing sold 737s only when Airbus’s A32x production line was too busy to meet timescales expectations, etc.
Probably the most key aspect is can Boeing even be bought ? (let alone for a low ball price)
The gave up a for sure order of F-18s as well as incurred Canadian ill will on any future bid for anything in Canada.
Like Martin Landau under the Rock in Hallelujah Trail, just have to see what happens.
Now Airbus hoping for a sure Canadian order of former Austrian Eurofighters (probably a training unit) along with new Traunche 3 jets.
Or by recent shenanigans, which will give the best backhander 😉
I read an interesting comment on another airliner manufacturing website within the last few days. Let me “amp up the paranoia”! What if AB took its 51% in the CSeries just to PROTECT its A320/A321 neos? What if they just intend to “slow walk” the CSeries marketing, US production, and product support? It’s still the “strangle the baby in it’s crib” strategy BA should have followed over 35 years ago, as AB was coming into its own. Watch your back, Bombardier. Talk about Machiavellian! LOL
It may be, but the fact is A320 is ageing and has inferior economics to 8 max. So why not do a double blow and crush 8 max with CS500 AND 10 max with 321?
In what year or years would Bombardier be able to fulfill an order of several dozen Cs500’s? Would that be in time to meet the requirements of Delta’s current RFP?
Obvious the C500 is not part of this order.
It may be an eyeballer down the line though.
Not for the Delta RFP, in general. Delta RFP is for A321 or 737-10/
Hi Delta will be the winner of this situation.
What’s on their wish list ? (we are close to X-mas)
– We half a ton of aging 757s, 767s wanna buy back ?
– We need our CS100/-300’s. Anyone blocking this, raise your hand..
– Our 747’s are out. Anyone has ideas for Asia (-351, 777s) ?
– We too are absorbing A321s at high rates. Pl$ change our mind$
“Our 747’s are out. Anyone has ideas for Asia (-351, 777s) ?”
Not a credible enticement for Airbus nor Boeing.
DL(excluding fleet decisions made by NW) hv never ordered a type with
capacity close to 350seats(manufacturer nominal 3-class) or more since the 1970s while both 35K and 778 are 350 seaters.
Per DL’s current intercon hub network in the U.S., maximum gauge for Trans-Pcf ops means no more than 300seats which is fundamentally why 359 is in DL fleet.
DAL can tell Boeing that Airbus won but Airbus does not know, but DAL can order some MAX-10’s if Boeing drops the C-series complaint and DAL will pay the same price to Boeing as they pay for the A321’s. Boeing will start requiring the same number of aircrafts, DAL will say no 20% as the MAX-10 is inferiour, they will finally end at an additional 33% of Boeing’s in addition to the A321’s and Boeing has to buy the old DAL 757’s and 767’s for cargo conversions at DAL book values..
“DAL can tell Boeing that Airbus won but Airbus does not know…”
Hard to keep it as a secret for long. Leaks re fleet decisions are everywhere in this industry and industry media like leehamnews.com has been especially good @ tuning into those leaks…
“..DAL will say no 20% as the MAX-10 is inferiour..”
Max10 may be technically inferior to 321Neo but Max10 is clearly superior to 321Ceo which has been the only 321 version actually paid by DL.
It all depends if DAL want to cram the pax into 737-10’s. It can be so for flights up to 90minutes where the competition also flies 737’s (Southwest). For all longer flying the Airbuses will be used I think also on routes where the are lots of Airbus competition. There are big guys in Atlanta and in the South that want all the seat space they can get in economy, Southwest should start feel the competition in Texas when American start flying new A321neo’s from DFW.
“..depends if DAL want to cram the pax into 737-10..”
Which can also be done with a 321Ceo. In case U are unaware, all 321Ceos in DL config today already carry 192seats across 2.5class(Y+ counted as 0.5 class) despite Airbus brochure config uses only 185seats in 2-class… Most importantly, why DL want to “cram” 1 but not the other?
“For all longer flying the Airbuses will be used.”
Why? In std 2-class brochure configs, Max10 can actually fly 15nm further than the most capable, late model 321Ceo variant on sale today. At worst, Max10 is @ least equal to 321Ceo in terms of payload/range while the CFM-Leap obviously return much better fuel burn than CFM56.
“…big guys in Atlanta and in the South that want all the seat space they can get in economy, Southwest should start feel the competition in Texas when American start flying new A321neo’s from DFW.”
If the competition is truly about maximizing Y seat count as U suggested(I doubt though), the highest density 321Ceo cabin in AA today carries 171seats in Y while the Max8, a smaller bird than any 321, flying for Southwest today has a minimum of 175seats in Y….this is despite Southwest offer roughly 1 inch more Y seat pitch than AA’s 321Ceo.
AA hv been flying 321Ceo fm DFW for yrs against Southwest flying 738 fm Love Field. I don’t think 321Neo will change the overall competitive picture in Y much(if at all) vs Southwest with Max8….and that’s assuming Southwest will never add the Max10 variant.
Just compare i.d. and seat width for the 737 and A320 and you see the difference. For pitch it is up to the airline how many slim seats they shovel into the fuselage.
It would be pretty funny if Boeing gets the order,kills the complaint, then Delta cancels the order and says “go ahead SUE US!!!” and buys A321
Hello Mark from Toronto,
At any corporation that I have ever been involved with, when millions of dollars, let alone billions of dollars are involved, there is no such thing as a handshake agreement. Who pays for what when, what they get in return and when, what happens if payment is not received, or the item payed for is not delivered, or exactly what concession is granted and the conditions on which it is granted, are spelled out in painstaking detail in contract documents that run for dozens or hundreds of pages. Given Boeing’s track record in their legal disputes, I doubt that their lawyers would be so sloppy as to agree to a contract that would allow Delta to renege on any agreement they had made without severe consequences as spelled out in the contract governing the agreement.
They would never put such a clause in writing as using trade laws to exert pressure could be construed as blackmail and that would be…well A CRIMINAL OFFENCE.
??? Does Delta have pictures of naked airplanes. Blackmail is using info that is embareassing of a personal nature. This would not be blackmail. I think you’ re thinking coercion, but it would not be that either. I think the only potential charge might be conspiracy to obstruct justice. But I don’t think that will work either. The power over Boeing Delta would have to yield for any of these charges to hold any possibility would have to be far greater that a 100 airplane NB order for a company Boeings size.
Maybe if Delta had proof that Boeing was liable for most cases of autism because of the air quality in 737’s. Maybe that could be blackmail or coercion but we are not even close here.
DL can cancel but no refunds, only credit to apply to future orders.
Just like most of the tickets I buy from Delta! There is justice in this world! Do they also get charged a “change fee” or get charged extra if they want to bring along baggage on a test flght?
While that is true, there is a lot of behind the scenes negotiations with give and take involved..
That said if there is a deal both side will stick to it.
Not so much for the legal end but the firms integrity (for what it is or is not worth)
Some funny human dynamics out shoot the legalese.
Our legislatures got bought and they were very loyal to the people who bought them and one said so.
Somehow that trumped the people who voted for them.
“DL can cancel but no refunds, only credit to apply to future orders.”
Which DL did with a Boeing contract most recently in regards to the legacy order of 788 x18 by NW placed in 2005.
”Bombardier is set to become a key supplier on a new engine nacelle programme for the Airbus A320neo family of aircraft which is powered by the Pratt & Whitney’s Pure Power PW1100G next generation engine. ” https://www.irishtimes.com/business/manufacturing/bombardier-to-make-thrust-reverser-for-airbus-family-of-aircraft-1.3315003#.WiV5XUfpPuY.twitter
Just curious; who currently makes the thrust reversers for the Pure Power PW1100Gs?
UTC Aerospace Systems, Aerostructures: Nacelles; Nacelle & thrust reversers, variable area nozzle (A320neo)
UTC Aerospace Systems, Actuation Systems: Electromechanical Actuators: Actuation systems for nacelle, thrust reversers & variable area nozzle (A320neo)
Woodward HRT: Hydraulic Actuators; A320neo variant Thrust Reverser Actuation System for the PurePower PW1100G-JM
Calaude B: Well found.
Airbus is not loosing any time in moving on this.
Me thinks they is serious about the C.
Possible wobble, too: Delta books the single aisle order with Airbus, but signs an LOI for 767s. Maybe even uses the A321 order to tinker with A350 plans.
I know, not all that likely, but DL’s 767s are, while well maintained, and sporting decent cabin refurbs (except the 764s which really need new PTVs), the frames are getting old.
Delta has already pushed delivery of some of their A350s. And Scott has a (paywalled, so I’m just going on the teaser part) newer item up that seems to suggest a bit of an increase in the possibility of the 767 pax line restarting.
Interesting days – concur. Boeing doesn’t need Delta, and Delta doesn’t need Boeing. As mentioned, could boil down to the intangibles: personalities, the CSeries conundrum, the 767, the Boeing Board unless they’re totally enamored by the stock price, etc. Could be the split order, and I do see Delta wanting the CS500. Also, these guys could really surprise the industry…
maybe this is an indication, that they are serious to take the A320 and find another way around the C Series fines, until Airbus has a C Series assembly line ready in the US. I don’t know, whether they can wait that long to get the C Series
Aha. Anyone know what the duties situation would be if, say, Delta purchased 5 year old CS100s from AeroMexico in 2023? Still the full whack, I’d guess.
In the meantime, one presumes that AeroMexico couldn’t even land a CS100 in the US, so it creates some fleet planning challenges.
They can land any plane. It is not being imported.
The problem for Boeing with a restart of the 767-300ER for an airline used to A330’s is that it is a step backwards in payload/range, cargo, flyby wire and all the goodies it gives in capabilities and maintenace cost, don’t know if you even can get carbon brakes on a 767? Boeing could in theory ask GE for a CF6-90C2 Engine with GE9X/LEAP Technology, do an aero cleanup, reuse cockpit from the 767-2C, carbon brakes, weigh loss program and replace a bunch of boxes and components to a later generation and have FBW in pitch like the 737-MAX, still it requires a certification program that takes time and maybe does not meet the A330ceo/neo performance anyway.
This must have been exactly the considerations when Boeing decided that the 767 is not worth an update but need to be replaced with an all new plane, which became the 787.
Besides all the factors you mentioned there is also the outdated production method of the 767 which makes it as expensive to produce as the much later A330. Then you have the old-tech wing, which would also need to be replaced to gain comparable efficiency. Such a complete overhaul can’t make economical sense.
Bottom line: Boeing would have to sell a plane at a loss to airlines that would be willing to buy outdated planes – in an environment where fuel prices are going up again. I just can’t see it happen.
The reality is that if the 767 suits routes, and Delta has like it (in the 300 and 400) then it may still be viable.
There is quite a pax carry difference between the two.
I am old and outmoded as well, but I do show up for work each day vs the younger generation that has issues there.
I am not saying Delta will, but they might.
And the tooling and all have been paid for, its cost to produce vs newer whiz bang is less per the pricing of the A330NEO.
Well supported for the future as well with FedEx, maybe more UPS orders and the USAF tanker.
Don’t put it out to pasture just yet.
Pax difference between the A330 and 767, let alone the various versions.
“Pax difference between the A330 and 767”
And that’s exactly the key attraction of a 763ER over a 332 for many current 767 operators and perhaps future 797 customers. For many 763ER routes today, 332 is over-kill /too large gauge for their traffic load+frequencies.
If traffic level on these 767 routes is enough to sustain 332 gauge, they would hv gone 332 or 788 a long time ago in which some did e.g. some UA /NH 763ER routes became 788 routes in Trans-Atl /E.Asia and almost all QF /HA 763ER routes became 332 routes. On the other hand, replacements for some 763ER capacity used to be deployed for shorter missions hv gone downgauge with 321 such as MU’s E.Asia ops, NH’s domestic ops and recently, HA’s Hawaii-W.Coast ops…..a route+frequency suitable for 321 gauge is no way suitable for 330 gauge.
A330 cheaper to run, plenty second hand and very quiet and comfortable. But the tender is for single aisle and
The A330neo isn’t much more expensive to produce than the A330ceo. The engines are more expensive.
I’m not sure which aircraft is produced cheaper, A330 or 767 but Airbus can demand a higher price.
The orders by FedEx and UPS were to fill the gaps in the production line during tanker production. The price was accordingly.
The pasture for aircraft is freighter business.
“A330neo isn’t much more expensive to produce than the A330ceo.”
But the additional development fixed cost to redesign the wingtips+structures(to support higher MTOW) and a separate test & cert effort specifically for the 330Neo program aren’t cheap and must be absorbed by sales regardless of 200 or 400 units will ultimately be sold.
“The engines are more expensive.”
And a cheap to produce 330Neo without expensive T7000s is pretty useless for buyers isn’t it?
The A330neo development costs are already paid for (except testing for A330-800). Boeing does program accounting. Airbus does not. So other aircraft sales paid this development.
An A330 without T7000 is called A330-200 and A330-300.
BTW the first A330-300P2F was delivered lately to DHL:
With the Pacific in mind and the fuel guzzler F-35 on the apron the USAF needs a bigger tanker than the KC-46.
If Boeing drops the complaint against Bombardier in order to win this Delta order this will negate the need for a FAL in Alabama. In that case what happens to the Airbus/Bombardier agreement? In exchange for building the Alabama FAL Airbus received 50.1 % of the C Series program. If a U.S. FAL is not needed will the terms of the deal be renegotiated? For example instead of funding a FAL I could see Airbus funding a CS500 program. If Airbus is serious about supporting the C Series they should prefer to invest in a CS500 program instead of a FAL that is no longer needed.
My take is that the FAL in Alabama is needed to produce sufficient C-series planes, as Bombardier’s capacities would not meet expected sales.
In that case why not expand the FAL facility at Mirabel? This would be far more cost effective than setting up a FAL in Alabama
Maybe because in the long run they want to get ALL C-Series production over to Alabama and so in firm Airbus hands?
Airbus most likley will send planeloads of German engineers to Mobile making sure the new C-series FAL also can do A320neo series and all Equipment and spaces sized to assemble the tall legged A322 with 797 RR engines as well. Then depending on sales of the CS300’s they can slip one of those in the flow of A320-series production in a Bombardier paid FAL. Boeing should be careful as Airbus could sell their share they got for $1 to the Chinese and they will start building a CS500 FAL in Shanghai the next week putting the last nails into the 737 coffin.
Boeing’s litigation is directed at Bombardier, not at Delta. Any litigation expressly conducted against Delta would permanently damage the Supplier-Customer relationship over the current CEO reigns (Muilenburg vs Anderson) and beyond, due to remanence of resentment at Board levels. That the litigation indirectly invalidates Delta strategists’ decision-making could be triggering the same hard feelings, this Boeing Legal Counsels must be aware of by now, as red lights and other warnings are igniting all over the relevant panels. Caution is recommended. Backing out before locking into irreversible damage could be the preferred solution. The message has got over to where intended and the PR has been fully effective. Isn’t it time to pacify things ?
Hello Frequent Traveller,
Regarding: “Any litigation expressly conducted against Delta would permanently damage the Supplier-Customer relationship over the current CEO reigns (Muilenburg vs Anderson) and beyond,…”
Richard Anderson stepped down as Delta CEO in May 2016 and retired completely from Delta in October 2016. The CEO of Delta since May 2016 has been Ed Bastian. Richard Anderson is presently CEO of Amtrak, a partially government funded for profit corporation that oversee most US passenger railway service.
Thank you, AP ! … indeed I wasn’t totally up-to-speed on Richard’s whereabouts in my comment, but I feel safe proposing that he had served Delta well, leaving imprints of his resolutely personal style of guidance throughout the spectrum of the corporation … the issue of your correction to my comment is about whether said ‘imprints’ have a memory, ie whether Boeing are or are not interfering with their Customer’s corporate culture ?
@frequent traveller. “Any litigation expressly conducted against Delta would permanently damage the Supplier-Customer relationship over the current CEO reigns (Muilenburg vs Anderson) and beyond, due to remanence of resentment at Board levels. ” I think the damage is already done. Maybe not permanently but the board of Delta will remember this one for a long long time.
Yes, hurting your (big) customer’s business by using government to block a non-competing product probably raised questions on business ethics & customer loyalty. I can see that.
I would get the A321Neo which can cover many regional routes the 767 covers.
Increase capacity by creating mega hubs in Atlanta and JFK with a few A380’s and divert traffic away from UA and AA hubs in Houston, Newark, Miami, and JFK. Have guts and become the Emirates of the US.
Nothing wrong with the A321 (a lot right) , but if you need the pax capacity t of a 767, the A321 does not cut it.
As for Emirate, seeing as how Delta is a private entity, they have to make their own way and that is not the A380 (or 747)
note that it was Dubai that is insisting on guarantee from Airbus for A380 continued production.
That pretty well tells you which tail wags which dog.
I agree just wanted to throw a provocative idea: ) One of the mainUS carriers will try to stand out at some point. Remember that the US carriers were late with the 777300ER, private suites, etc. They are a decade behind atleast. They will have to keep moving the goalie post in order to compete with foreign carriers and each other.
“One of the mainUS carriers will try to stand out at some point”
Disagree. Each of them is trying to stand out….but almost exclusively in front of their investors and premium class customers.
“Remember that the US carriers were late with the 777300ER”
And do U also remember that:
1) When the 77W was in development/just EIS, there was a drastic thing known as U.S. industry downturn thx to 911?
2) Shortly after 1), almost all U.S. widebody operators @ the time in which a 77W could remotely made op sense per their networks went into Ch11?
3) Shortly after 2), there was another big thing known as U.S. airline industry consolidation which gave us the U.S. Big3 today and the only realistic buyers for 77W in the U.S.?
4) Circa 2012-13, mkt demand & avg transaction price for 77W started to drop dramatically(Partly prompted Boeing to launch 77X in 2013) till today?
No U.S. airlines would seriously thought about(let alone ordering) 77W in their fleets thx to the effects & naturally, corp focus during 1), 2) and 3).
AA was the 1st U.S. airline to order 77W in 2011 but only for 2 units. Shortly after that around 2012-13, AA suddenly ordered many more(and UA joined the same game much later). U think this is pure coincidence in terms of order timing for 77W by AA/UA? They finally
bought 77W in bulk not for some romantic idea of catching up with foreign carriers or moving a mythical goal post but for bargain basement priced new-built longhaul fleet capacity.
“private suites, etc. They are a decade behind atleast.”
They WERE late in terms of premium cabin product std but clearly not any more. The highest spec J seat on AA is as good as the best fm JL, CX and SQ today(actually, the same basic reverse herring-bone design fm the same manufacturer….don’t take my word for it, look it up). The latest Polaris design on UA absolutely shame the best J design fm LH, BA, QF and even the recently debuted EK J design (Direct aisle access NOT for every J seat) for 77W/77X. The DL One suite design is IMHO, the highest spec J in the mkt today ahead of any other airlines anywhere worldwide.
The U.S. Big3 are not investing in F anymore but that’s a diff story since the longhaul F mkt size worldwide is seriously contracting anyway….all carriers still operating longhaul F today are planning smaller and/or fewer F cabins(but bigger F suite) in their fleets relative to 10yrs ago.
“As for Emirate, seeing as how Delta is a private entity, they have to make their own way and that is not the A380 ”
Not only that. EK has a completely diff biz/network model fm DL(actually every U.S. Big3).
With the level of traffic EK has, it’s actually easy to fill large fleets of 380 when almost every EK pax MUST goes to/fm/thru 1 single hub. Totally diff story for a hub network like DL’s. For the U.S. mkt, any U.S. longhaul carrier must hv multiple hubs in order to compete today. It’s totally unrealistic(in fact, financially suicidal) to expect a J pax traveling between SEA and PEK to connect @ ATL for example just to be able to entertain a “provocative” grand idea of justifying/flying 380 in a U.S. airline fleet. The more hubs an operator or a nation has, the more useless a 380 becomes.
“That pretty well tells you which tail wags which dog.”
Recall in the late 60s till the early 70s, too many wrong tails were wagging too many wrong dogs when almost the entire U.S. airline industry ordered 747 just because X wanted to stand out and everyone else didn’t want to be left behind and believed 747 was their solution. DL got out of that jumbo jet game quickly by the late 70s and has never ordered anything with more than 300seats ever since till today. 2 decades later, only 2 U.S. carriers were still ordering 747 not because they were financially the strongest but because they were the only ones with the optimal hub+route networks to support 747 ops. I suspect some commentators here are too young to remember or be aware of that industry history whenever they champion the idea of U.S. Big3 can use 380 today.
Most likley will Honolulu be the US A380 hub you describe. If you get bumped or your flight cancelled it is a nice place to be in, the next morning they probably have fixed the big spacious Aircraft and you can take off with a bonus check and a new sun tan. With Hawaiian getting deliveries of A321neo’s enough flow from the mainland mid size cities + pax from A330’s from the bigger ones will fill a few A380’s.
Will will see the inbound pax volume when ANA starts A380 traffic.
“Increase capacity by creating mega hubs in Atlanta and JFK with a few A380’s…”
And close down SEA, LAX, SLC, MSP and DTW hubs and then force all DL pax originally flying/connecting fm these hubs to help concentrate feed @ ATL or JFK “mega hubs” instead just because DL need to copy EK fleet strategy and more 380 therefore can be sold? Such new DL hub model/routing proposed by U will be interesting for a DL customer who simply want to travel between SEA-HKG, LAX-SYD or even MSP-HND…..
There are strong commercial/mkt reasons why each of the U.S. Big3 has many more intercon hubs/gateways today relative to 2 decades ago. And those reasons hv nothing to do with “have guts” or “become the Emirates of the US.” The U.S. Big3 probably simply want to become the most profitable/valuable in Wall Street….
Another shoe drops – Canada cancels order of new Boeing F-18 whatevers, will buy used ones.
F-35 still to be decided, new gummint promised to cancel but it has already reneged on several promises.
Big question is how serious Canada will get about defending North America. A retired military chief pointed out that the F-35 was much more interoperable with F-22s in Alaska, able to exchange radar data, thus each force would need fewer aircraft on a mission.
If my projections are correct, the max10 is already in the bag. Recall DL wanted the c series partially to give AB and BCA competition so the knife cut both ways. If they went AB with this order they would likely lose Boeing interest on future orders which is the antithesis of their fleet strategy. Also CFM is likely very involved to ensure with the cseries on order that they don’t become an all PW house. Add the negative press on the SEA hub side and it’s Boeing’s to lose. The trade complaint seems now to be a well played hand and icing on the cake
I didn’t realize so many people could fit in a Delta Airlines boardroom. 😉
(That line came from a wag who commented on crazy pontificating, speculating, and worse babbling about performance of a fem who crashed her F-14 approaching a carrier: “I didn’t know that many people could fit in the cockpit of an F-14.”)
Indeed, when I worked at Boeing in the late 1960s engineers who had trouble with a supplier earlier were now supervisors with long memories.
Very likely the case with airlines too, I forget.
(Certainly I was very wary of Collins due to the sleazy salesperson my staff called “Charlie Tuna” from the TV commercial, he who asked how people in the wheat fields of Kansas could produce good radios – well, at least as good as those from the cornfields of Iowa.
And of Douglas salespeople for misleading me on the pitch of seats in a proposed cabin layout for DC10-30.
Boeing got wind of Douglas’ misleading cabin layouts and sent a layout for the 747SP with an amazing number of seats, with tongue firmly in cheek. Fudge on pitch, reduce number of lavs, etc. and you can do much.
I thought the L1011-500 was a good airplane to replace 707s with, but Lockheed couldn’t sell their way out of a wet paperbag.
In the event, PW decided to get out of the overseas pax business rather than invest more, as the 737 mainland and charters to sun destinations had become a far larger part of the business.