Delta:We'll Pass On The 737Max And A320neo,for Now - Airliners.net
Delta Air Lines CEO Richard Anderson had some interesting comments on the carrier's fleet options.
Looks like the company plans to wait to see the performance of the 737 Max and A320neo before looking at orders. The Company does have the option to convert 40 of their 100 739 order from 2011 to the Max should they choose.
"The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."
In regard to the Airbus A330/787, Anderson commented, "We operate 33 A330s and were a launch customer in the U.S.," Delta's Anderson said. He added that should Boeing hope that its stretched 787 will take sales from the A330, "its prices have to come way down."
Source: Reuters
Link: http://www.cnbc.com/id/100759006
37 replies: All unread, showing first 25:
Quoting rising (Thread starter): "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."
That surprises me. In nearly every other industry, total cost of operation is pretty much standard. In the industry I'm in, which is capital intensive to break into, the tax treatment of various purchasing options for the customer is always a part of the sales presentation.
This makes me wonder if perhaps DL is looking at the C series as well. The C series would be a very nice fit for them.
As far as the 787 goes, my opinion is that Delta will have them eventually, and I think the 787-8/9/10 will be the bread and butter of their international fleet. I would not be surprised to see 50+ 787s in their fleet 15-20 years from now.
Quoting FlyingGoat (Reply 2): This makes me wonder if perhaps DL is looking at the C series as well. The C series would be a very nice fit for them.
With DL getting the 717s from AirTran, I don't see a CSeries order anytime soon.
For the 787, I expect DL will likely place a separate order for the 789 with GEnx engines, and perhaps sell off the existing 788 order.
Quoting 1337Delta764 (Reply 3): For the 787, I expect DL will likely place a separate order for the 789 with GEnx engines, and perhaps sell off the existing 788 order.
As opposed to just upping their 788s to 789s? Why would they do that?
It sounds like DL did not get the deal they were looking for. Perhaps they want a lower price than what UA and AA got.
Quoting rising (Thread starter): "The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."
Well to be fair, the capital cost is never actually known until the end of the sale process. It is all part of the negotiation, it is all part of the real calculation that goes on internally in the airline during the sales process where the airline is evaluating at what cost a buy will make sense. The airline uses what prices are determined to work as their base line to decide whether or not the salesman with his charts will get the sale.
Tugg
Quoting RDH3E (Reply 4): As opposed to just upping their 788s to 789s? Why would they do that?
DL always goes for the best engine available at the time (as they did with the 767 and 772ER), and the GEnx is currently the superior engine for the 787. Doing this way DL can get the aircraft and engines they want without violating the contract that NW had with RR. GE is also one of DL's financers.
Quoting FlyingGoat (Reply 2): This makes me wonder if perhaps DL is looking at the C series as well. The C series would be a very nice fit for them.
no need. they have the 717.
Quoting 1337Delta764 (Reply 3): For the 787, I expect DL will likely place a separate order for the 789 with GEnx engines, and perhaps sell off the existing 788 order.
Highly unlikely that the Trents don't happen with Delta. UA and AA are both going GEnx, Rolls will likely offer Delta a deal that can't be matched by GE.
Could also mean a Trent 1000 line for TechOps.
Quoting RDH3E (Reply 4): As opposed to just upping their 788s to 789s? Why would they do that?
because the CF6 powers the 764....thus anything GE makes is gold.
what do you mean by this? GE doesn't own any Delta stock that is large enough to show up on yahoo.
Quoting 1337Delta764 (Reply 7): Doing this way DL can get the aircraft and engines they want without violating the contract that NW had with RR.
They still have to cancel the RR contract. Even if they "sell" 18 as you say they still have options and other parts of the deal that would have to be worked out.
You know that with the BR715s, T800s, and V2500s Delta has a very large Rolls fleet now. GE will still have 150-200 more Delta engines but it is very close. Delta and Rolls will have a nice relationship in the future.
Quoting 1337Delta764 (Reply 7): DL always goes for the best engine available at the time (as they did with the 767 and 772ER), and the GEnx is currently the superior engine for the 787.
You can't tell me, or anyone, that the GEnx will be the "superior" engine when Delta takes 787s. Just because the CF6 powers the 764 that doesn't mean that Delta is going to order nothing but GE engines from now on. Rolls could very well put together a package that keeps RRs on the 787s. This could mean financing, possible MRO contract for Delta TechOps (or very very good terms on a power by the hour agreement, but lets hope its a MRO contract for TechOps)
IMHO at best you'll get a split order. I just can't see GE being able, or willing to, beat the terms Rolls is likely to offer DL to be the only US 787 customer. AA signing the deal to have GE lease the 787s to them with GEnx engines, IMO, sealed the deal.
Quoting rising (Thread starter):
Looks like the company plans to wait to see the performance of the 737 Max and A320neo before looking at orders. The Company does have the option to convert 40 of their 100 739 order from 2011 to the Max should they choose.
Pretty much the Delta thing now. Wait and see then pick one. Can't argue the point honestly. The MAX likely wont be "that"much better than late built NGs.
Quoting rising (Thread starter):
"The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."
I think this is something people tend to forget. Delta's plan is to buy airplanes so the capital cost plays a big factor to them. This was a key reason Boeing got the 737-900ER order.
Sorry, but RR is no longer part of the IAE consortium.
And the newer 763ERs, and the 772LRs, and in part on the 737NG and A32x fleet. We know you are a die-hard RR fan since they were the exclusive engine on the L-1011. Sorry, but the relationship with GE is obviously the stronger relationship.
BTW, DL could have ordered the Pratt & Whitney PW4062 engine instead for the 764ER, however, they chose the CF6-80C2B8F because it was the superior engine.
[Edited 2013-05-22 15:00:37]
Quoting AADC10 (Reply 5): It sounds like DL did not get the deal they were looking for. Perhaps they want a lower price than what UA and AA got.
Looking through Delta's SEC filings of 31 August 2011, Jon Ostrower with the WSJ projected that they received a 51% discount on their 737-900ER order (airframe and engines).
As for the 787-8 order, NW was an early customer and it appears that they will pay $139 million a piece for them based on those same DL SEC filings noting they had $2.5 billion in aircraft purchase commitments from 2020 to 2022 that related to 18 787-8 aircraft.
Quoting 1337Delta764 (Reply 9): We know you are a die-hard RR fan since they were the exclusive engine on the L-1011.
Again, for the last time, as long as Delta fixes it, I couldn't honestly give two s...craps what they fly or who makes it. Do you understand now. I can't possibly type it any slower.
While they sold the stake, RR is still a part of the V2500 engine. A good chunk of the engine came from them.
No choice. On the 777s they could pick an engine they have Rolls.
Uh its not like the PW4000 fleet is "old" but again, you're basing your comments on something that happened 10 years ago?.....really?
Who else were they going to pick? NW order, not Delta.
Quoting 1337Delta764 (Reply 9): Sorry, but the relationship with GE is obviously the stronger relationship.
please, provide proof of this.
But you're not using logic so it doesn't really matter. I honestly wish you knew as much as you think you do.
This isn?t that much of a surprise. Delta is following the Northwest model of keeping airplane capital costs low by acquiring used airplanes and holding its fleet longer. It?s been acquiring reasonably efficient 717s and MD90s that no one else wanted. The 737-900ERs are some of the last off the line and would have come with a big discount that Boeing would not offer on the MAX. Delta pays the price with higher fuel burn and maintenance, but obviously they have made the evaluation that expensive new airplanes are not their best option.
Quoting rising (Thread starter):
"The airplane salesmen always show you charts that have these big operating savings," Anderson said. "But the charts never have the capital cost, so it is a little bit of a fallacy to analyze airplanes without the capital costs included."
> This man deserves a Nobel prize here.
Boeing always says the 787 is "sooo much cheaper to operate"
But it depends on the specifics. Delta seems happy with their 763ER Winglets. Which is "cheaper?" Maybe RA is telling us.
Quoting Deltal1011man (Reply 8): what do you mean by this? GE doesn't own any Delta stock that is large enough to show up on yahoo.
GE Capital undoubtedly works with Delta (ie 77L) as a money lender for engines, and anything else.
Quoting 1337Delta764 (Reply 3): With DL getting the 717s from AirTran, I don't see a CSeries order anytime soon.
I had a brain fart and totally forgot about the 717s. I agree then, not much room for the C Series. Maybe one day... ??
Quoting Flighty (Reply 13): GE Capital undoubtedly works with Delta (ie 77L) as a money lender for engines, and anything else.
Which is why GE could offer DL a good deal on 787 engines. DL doesn't get any such benefit from RR.
Quoting FlyingGoat (Reply 2): This makes me wonder if perhaps DL is looking at the C series as well.
We all know what they are looking for: MD-90s, MD-95s (err, 717s), DC-9s, anything with Douglas heritage!
No surprise here!
Quoting Flighty (Reply 13): Boeing always says the 787 is "sooo much cheaper to operate"
But it depends on the specifics. Delta seems happy with their 763ER Winglets. Which is "cheaper?" Maybe RA is telling us.
The 787 really is "sooo much cheaper to operate." That's not debatable. Nor is the fact that ordering new-build 787s has a greater financial burden than continuing to operate already-owned 767s. RA, and Delta in general, is looking at the bigger picture.
I posted about this before when Delta ordered 737-900ERs instead of the MAX, and I'm not sure just how accurate the numbers are.. but:
737MAX is projected to be 14-16% more efficient than 737NG.. 739M costs about 12% more than current-build 739s. Once you consider other costs, it would seem the 737NG and 737MAX are about the same price in the long-run.. with the 737NG being cheaper in the short-run.
Quoting 1337Delta764 (Reply 3): With DL getting the 717s from AirTran, I don't see a CSeries order anytime soon.
?? If anything, I could even see DL getting a bunch of old E-jets..
[Edited 2013-05-22 16:03:37]
Quoting ghifty (Reply 17): 737MAX is projected to be 14-16% more efficient than 737NG.. 739M costs about 12% more than current-build 739s. Once you consider other costs, it would seem the 737NG and 737MAX are about the same price in the long-run.. with the 737NG being cheaper in the short-run.
If Boeing was smart and acted completely as an independent company interested in maximizing profit, the total lifecycle costs for the 737-900ER would be the same as the 737 MAX-9. That means for all the dollars that were saved with the MAX's operating efficiency improvements, the purchase price would be equivalently raised. That doesn't actually happen in real life with imperfect competition, but on paper, it makes economic sense.
Just because he didn't specifically exclude the C Series, doesn't mean they're considering it. In fact, if any airframe out of the MAX, NEO, or C Series needs performance proving it 's the C Series.
Maybe they'll buy the B6 E fleet when it's time to replace the 717s ?
Quoting Roseflyer (Reply 18): That doesn't actually happen in real life with imperfect competition, but on paper, it makes economic sense.
?? Makes sense.
It's hard for me to accurately construe anything since neither Boeing nor Delta releases the actual price of aircraft sold/purchased. What is list price even used for..?
Quoting catiii (Reply 19): Maybe they'll buy the B6 E fleet when it's time to replace the 717s ?
And then purchase T5 and move out of T2.. ?? ??
[Edited 2013-05-22 16:19:17]
So your saying rolls doesn't offer power by the hour on the Trent 1000?
Oh and the BR715 engines are all power by the hour and owned by RR. So clearly they can do so
Ah probably true. Not sure who owns those engines. (Always forget about them)
Quoting Roseflyer (Reply 12): Delta pays the price with higher fuel burn and maintenance, but obviously they have made the evaluation that expensive new airplanes are not their best option.
Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.
Quoting DocLightning (Reply 22): Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.
It is working. Cuts CAPEX (is this the right term?) immensely.
I think it's at variance.. because it simply can be. Where else would FL's 717s have gone? Or the ex-TW 757s? Or those MD-90s? If UA/AA wanted them.. DL's model wouldn't be sustainable, but they don't so it is.
Quoting DocLightning (Reply 22): Which is an odd business model to take, but seems to be working for DL. I'd be curious to ask Mr. Anderson why his fleet strategy is at such variance with those of his competitors at UA and AA.
Indeed...i would have to assume Delta and AA and UA (along with Southwest, jetBlue etc....) have looked at the exact same numbers with regards to aircraft and come to vastly different outcomes. Delta operates more like an upstart that scours the globe for used aircraft that the majors no longer have a need for wherease AA and UA have been ordering new aircraft by the boatload.
25 LAXintl: Except the A330 does not compete with the 787. The A330 is of course cheaper as result. More appropriate comparison would be 350 vs 787.
26 stlgph: Having a variance in a fleet makes it possible/easier for Delta to add used/second market aircraft to the fleet at its leisure.
27 LAXintl: If you want power-by-hour on the 787, you need to sign up for the Boeing Gold Care solution. GoldCare features engine support option with either the G
29 LAXintl: That's like saying Honda competes with Mercedes. Sure both will get you from A to B and the Honda could be suitable for many clients, but at the end
30 EASTERN747: Ok,,,,,,,What is a 737Max and 320 whatever?
31 lutfi: Not true, the engine PBH deals & Gold Care can be separated. Some airlines have gone for LHT/AFI/BA for airframe/ component PBH support, and engi
32 RickNRoll: It's all apples and oranges. The airline chooses the plane that's fit's their needs, their business model and price. Which is why A330 manufacturing
34 goldenstate: How is the GEnx superior, and what makes you think that DL decision makers have that view? I don't see how you could have reached this conclusion. It
35 Deltal1011man: For Delta's needs I bet the low ownership cost and fairly low MX numbers is playing a big part of it. Over time the the 767-300ERs will have to be re
36 LAXintl: I am pretty certain not, or atleast it was not possible in 2011. Restriction was part of joining GoldCare, with parties being precluded from competin
?
? If anything, I could even see DL getting a bunch of old E-jets..
? ?
?
কোন মন্তব্য নেই:
একটি মন্তব্য পোস্ট করুন