Delta Airlines (NYSE: DAL) is purchasing around 100 737 MAX Boeing airplanes, the company’s first major purchase order for brand new planes from the United States manufacturer in over ten years. The agreement has an option that allows them to acquire 30 more planes and the deliveries are expected to begin by the start of 2025.
The new agreement is good for the Boeing Company as its Airbus recently registered high-profile sales results, including to several different state-owned airline carriers in China. Boeing hinted at trade tension when the deal was announced.
Details of the deal
The purchase order is worth around $13.5 billion, but it’s very common to get discounts with such agreements, especially involving huge sales like this one. Delta Airlines did not disclose the amount it paid but it said that the deal would not change the company’s latest capital expenditure forecast.
On Monday, the Airline said that the purchase agreement will modernize and improve its narrow-body fleet to capitalize on the rebound in global travel following the slump caused by the global pandemic. Delta said that Max planes will be about 20-30% more fuel-efficient compared to the jetliner options they’ll replace.
Delta, which is based in Atlanta, is the only top four airline carrier in the United States that has not ordered a set of new Boeing planes in the past couple of years, favoring Airbus as it enhances its longer-range and narrow-body fleet. Delta stopped using the older 777 Boeings during the Covid pandemic and has started taking more deliveries of the A350 Airbus planes.
Management statements
Dave Calhoun, Boeing’s Chief Executive officer said:
We have to make our case and it has to be persuasive, and we believe it is.
Delta, on the other hand, said it expects to get an FAA sign-off by next year. Ed Bastian, Delta’s Chief Executive Officer said:
We’ve been trying to get a deal done with Boeing on that … hopefully we’ll be able to figure that out.
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