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Delta Reviewing $14 Billion Wide-Body Deal in Blow to Airbus
Delta Air Lines Inc. is reviewing its wide-body jet orders amid signs that the long-range travel market is saturated, Chief Executive Officer Ed Bastian said Wednesday. (www.bloomberg.com) More...Sort type: [Top] [Newest]
The bigs jets are a saturated market. The 747 passenger jets are disappearing. They have been replaced by the A380 and the 777. I have seen passenger configurations for sale as low at 15 million and cargo configurations for as little as 2 million. The only other aircraft that is so cheap are the A340s. Owners of legacy equipment are stuck with the choice of more capital cost versus operational efficiency or less capital cost with less efficient aircraft. I guess it just depends on the frequency of use as to which choice makes more sense.
Perfect opportunity for Boeing to bring back the 757 to the market
I've read reports recently that airlines in general, especially U.S. carriers, have been growing too much (in the international markets) and getting too many widebodies, and that they need to reevaluate things. This aligns with the comments from Ed Bastian in that article. All I could think when I read it last night was the same sentiment: 757 replacement. Delta already has a large fleet of 757 and is slowly trying to replace it with the 739 (not a stellar replacement) and the A321. I don't know what gets discussed unofficially or behind closed doors, but I have wondered for years if Boeing or airlines have ever tossed out the idea of a next gen 757 or an updated replacement. There are tons of 737 and A320 family aircraft. There are many widebody international configurations. But no one really has medium sized long range yet still domestic niche.
Delta recently bought a 777 used for about $8 million. Wide-bodies are not holding their value well.
If I were Delta and had to choose between perfectly capable and decently-conditioned 777s for less than $20 million each but used or new 330s and 350s for far more, I might just signal that I'm wavering on the Airbus order and see what shakes out as available in used condition as prices drop overall. That would also include used 330s, but I am not sure those are being "dumped" at the moment by carriers that fly them.
It isn't a bad tactic. If it doesn't work, you still have your order in place for the Airbuses.
If I were Delta and had to choose between perfectly capable and decently-conditioned 777s for less than $20 million each but used or new 330s and 350s for far more, I might just signal that I'm wavering on the Airbus order and see what shakes out as available in used condition as prices drop overall. That would also include used 330s, but I am not sure those are being "dumped" at the moment by carriers that fly them.
It isn't a bad tactic. If it doesn't work, you still have your order in place for the Airbuses.
All I know is that Boeing and other US carriers are looking at this next Middle of Market airplane, and I am guessing its going to be a small twin (767-200) for the quick boarding times for transcontinental and transatlantic. That's really all I can know from sources. But widebodies add to operating expenses so I am not sure, and even more weird is that the 757-300 didn't sell very well.
indication that Boeing/Airbus orders in jeopardy... too many planes... too few fliers