Leeham News and Analysis

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.