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Feb 13, 2018

Delta wants to be among first to fly Boeing's 797

Ed Bastian

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Delta Air Lines Inc. (DAL.N) is showing no hard feelings after its recent trade spat with Boeing Co.

The No. 2 U.S. carrier wants to be one of the first to fly a potential new mid-sized jetliner from Boeing (BA.N), said Delta Chief Executive Officer Ed Bastian. That’s a vote of confidence from one of the most influential aircraft buyers as Boeing decides whether to build the plane, dubbed the 797 by analysts.

“You’re going to see us participate in Boeing’s middle-of-the-market campaign,” Bastian said. “I hope that we’re going to be a launch customer on that program as well.”

The employee message shows how Delta is looking to play an active role in the development of Boeing’s first all-new jetliner since the 787 Dreamliner. The Atlanta-based carrier recently tangled with the planemaker in an international trade case involving smaller planes and placed a US$12.7 billion order last month for Airbus SE’s A321neo -- one of the toughest aircraft competitors to Boeing’s next new plane.

The airline calls Boeing’s proposed jet “an interesting concept,” said spokesman Morgan Durrant. The plane would be a potential replacement for Delta’s aging fleet of Boeing 757s and 767s on long domestic routes and midrange international flights. 

“Delta is actively engaged with Boeing on this and we will continue a healthy dialog with them as the program matures,” Durrant said.

Boeing didn’t immediately respond to a request for comment.

Testing Support

The cost of developing what Boeing calls the “New Midmarket Airplane” probably would run from US$10 billion to US$15 billion, Richard Aboulafia, an aerospace analyst at Teal Group, said recently.

Boeing is considering two models for the new aircraft: a 225-seat version with a range of 5,000 nautical miles, and a 275-seat version with a 4,500-mile range, Dinesh Keskar, Boeing’s senior vice president of Asia-Pacific and India sales, said recently.

Bastian’s employee message should relieve concerns that Delta’s dispute with Boeing in an international trade case will push the carrier into Airbus’s camp for the long term. 

Boeing last year persuaded the U.S. Commerce Department to slap duties of almost 300 percent on a new jet from Bombardier Inc. (BBDb.TO), called the CSeries. The Canadian planemaker sold 75 of the new planes to Delta at well below cost, Boeing alleged. The U.S. International Trade Commission ruled last month that the sale of the CSeries isn’t harming American industry and blocked the duties from being imposed.

Airbus Preference

While Bastian has said the trade case wouldn’t affect Delta’s fleet orders, its decision in December to order 100 Airbus A321neo jets over Boeing’s competing 737 Max 10 fueled industry speculation about whether Delta might shun Boeing for some period. The new Airbus jets will replace at least some of Delta’s older 757s, as well as McDonnell Douglas MD-90 and older A320 aircraft.

Boeing’s new 797 would give Delta better range than the A321neo and additional capacity to haul cargo, which is more important for international flights than for domestic ones, said George Hamlin of Hamlin Transportation Consulting in Fairfax, Virginia.

“Delta needs both Boeing and Airbus,” Hamlin said. “If it becomes beholden to one, that doesn’t give it much leverage in negotiations.”