Delta May Give 13 Billion Jet Order To Airbus Instead Of Boeing

Delta Air Lines will reportedly pick Airbus over Boeing for a 100 jet order worth $13 billion.

Between aircraft manufacturer, Boeing, and its European rival, Airbus, Delta Air Lines would want to secure a 100 jet order from the latter. According to several anonymous sources, the airline company is leaning towards Airbus for a potential deal that has an estimated worth of $13 billion.

The board of directors of the Atlanta-based airline is reportedly eyeing Airbus’s A321neo aircraft. Boeing’s contender in the bid is its newest 737, the Max 10. In addition, the deal would also include the acquisition of United Technologies’Pratt & Whitney engines. According to the sources, Delta wants to use the engines to power the new aircrafts. The company has to choose between Pratt, or the Leap, a new power plant built by a joint venture between CFM International, General Electric Co., and Safran Co.

The potential new additions to Delta’s fleet will replace the 1990s-vintage McDonnell Douglas MD-90 jets, several Boeing 757’s, and the Airbus A320 aircraft. Delta Air Lines will most likely use the Airbus A321neo for domestic flights and on shorter international routes. The company has the oldest fleet of airplanes among the largest three U.S carriers, with 847 mainline planes currently at their disposal. The other two carriers are American Airlines Group Inc. and United Continental Holdings Inc.

Boeing shares registered a gain of 0.7 percent to 291.84 on the stock market today, while Airbus and Delta shares rose $2.6 percent and 1 cent respectively. United Tech shares were up 0.7 percent.

This would be Delta’s second-biggest acquisition from the aircraft manufacturer in 3 years. The first order was for 50 Airbus wide-body jets in late 2014, with an estimated value of $14 billion. Ever since then, Delta had purchased over 70 Airbus A321 narrow-body aircrafts in three separate deals.

The A321neo, and its recent success with Delta, might push Boeing to build a midmarket plane that can open new routes that their existing models can’t. Airbus’s new aircraft was able to open new routes for airlines that weren’t accessible with smaller models or weren’t profitable with larger ones.

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