Delta to buy 49 planes from Boeing It is speeding up the retirement of older jetliners

Aerospace

December 23, 1998|By BLOOMBERG NEWS

SEATTLE -- Delta Air Lines Inc., the world's third-biggest airline, will buy 49 planes valued at $3 billion from Boeing Co. as the Atlanta-based carrier accelerates the retirement of older aircraft in its fleet.

The planes are part of a 1997 contract to buy up to 644 jets over 20 years exclusively from Boeing, the world's biggest plane builder. The airline has placed 173 firm orders and has about 471 options left.

Most of the latest jets are short-range 737-800s, which will replace older, noisier 727s. Airlines such as Delta and Trans World Airlines Inc., which recently placed its biggest order ever, are upgrading fleets in the hope of attracting more passengers and cutting maintenance costs.

"It's all within plan," said Delta spokesman Bill Berry, referring to the carrier's goal of retiring the last of its 727s in 2005. Other new aircraft will replace its Lockheed L-1011s.

The latest orders include 30 737-800s, 14 757-200s, three 767-300s and two 777-200s. Deliveries will begin next year. Delta placed the orders gradually over the past year in negotiations with Boeing, but they were not confirmed until yesterday.

The jet maker does not record orders in its backlog until they are confirmed by customers, because there is always a risk of cancellation. Boeing spokesman Fernando Vivanco said the company plans to record the 49 firm orders from Delta in December.

Delta and Boeing did not disclose the terms of the exclusive contract last year. While the jets are worth billions of dollars at list prices, analysts said at the time Delta got a discount of 20 percent or more to commit to such a long-term agreement.

Under the contract, the 737 engines will be supplied by CFM International, a joint venture of General Electric Co. and France's Snecma. United Technologies Corp.'s Pratt & Whitney unit will make the 757 engines, GE will supply the 767 engines and Rolls-Royce PLC is making engines for Delta's 777s.

Delta shares closed unchanged at $50.50 yesterday and Boeing shares were unchanged at $31.8125.

Pub Date: 12/23/98

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.