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Delta opts for Airbus over Boeing

Article By: ,  Financial Analyst
November 21, 2014 11:26 AM

US airline Delta has chosen Airbus as its preferred aircraft for the coming years.

The company has ordered 50 new Airbus wide-body jets powered by Rolls Royce engines to replace its old Boeing planes. The deal, worth around $14 billion (£8.9 billion), represents a huge coup for Europe's Airbus which has beaten off competition from Boeing's Dreamliner 787.

Delta stated that one of the key reasons behind its decision was Airbus' commitment to delivering its latest A330neo in 2019, ahead of the 787 Dreamliner. The US airline said that its order will include 25 of the new advanced Airbus models alongside another 25 Airbus A350-900 aircraft. The A350s will be delivered in 2017 with the A300neo's coming two years later.

Rolls Royce has also benefited from Delta's decision to go with Airbus, with the British company providing the Trent engines for both types of aircraft. The firm will also be responsible for long term servicing with Delta in an agreement worth $5 billion.

Nat Pieper, Delta's vice president of fleet strategy and transactions, said: "The A350 and A330neo support our long-haul, transoceanic strategy and join a mix of Boeing and Airbus aircraft that provide exceptional flexibility for Delta's global network as well as strong cash-on-cash returns for our shareholders."

Delta was full of praise of the Airbus model, with the airline believing that the A350-900 will help it optimise its Pacific network and improve long-distance services between the US and Asia. The fleet is expected to create a 20 per cent improvement in operating cost per seat compared to the Boeing 747-400s they are set to replace.

The A330-900neo will be taking over the role of Delta's fleet of Boeing 767-300ER and will also boast the same 20 per cent cost saving compared to its predecessor.

Delta's share price opened on a positive note, up 0.78 per cent to 96.80.

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