Delta Just Ordered 10 Airbus A350s, As It Prepares To Take Government Bailout Cash

Delta Air Lines is losing $60 million a day and not paying over a third of its employees who took leaves. It has parked the majority of its fleet. And i’s preparing to accept billions of dollars in government bail out cash.

Yet last week it appears to have placed an order for 10 Airbus A350s. Airbus announced the order, but refused to confirm the airline involved.

At list prices the order is worth about $3 billion so order of magnitude assume Delta is spending about $1.5 billion.

Delta’s deal this past fall to acquire a 20% stake in South American carrier LATAM included taking 4 Airbus A350s that were already in the LATAM fleet, and taking 10 orders off of LATAM’s hands. LATAM cancelled their A350 order. And almost simultaneously an airline placed a similar-sized order.

So it’s assumed this is Delta keeping its promise to LATAM and Airbus that was made in the fall. Delta does not yet have to take delivery of these planes, of course. The A350 may have been too large for the mission for which it was deployed in Delta’s fleet even before the current crisis. It may be even more so now, and adding planes may not be supported by passenger demand or financially prudent.

Nonetheless Delta continues to honor its end of the deal despite the sizable nature of the financial commitment.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Surprising move for such a tightwad operation. It would’ve made more sense to keep their aging but durable 767s for those routes, and maybe add Premium Economy and a fresh coat of paint. Even United has been updating their 767s.

  2. I am so glad I don’t have to fly them anymore. What a mess and lack of planning has done to DL by being cheap. Fleet is old and out of date and now they won’t have money to update. SEA and BOS will need to be shut down, no money and too much competition. Won’t be able to finish LAX so it will be a “on the cheap” remodel. With the exception of KLM/AF, their partners are folding fast, Good bye Virgin (Atlantic and Australia), Korean air will be a nationlized mess, AeroMexico. . who cares and LaTam was a mess to start (AA dodge a bullet there).

    DL will be JFK; LGA; ATL: DTW; MSP and SLC. . .with a piece of LAX. . the rest is gone. Better sign up for UA or AA programs soon.

  3. ^^^^
    This is why reading comments on blogs is just a complete waste of time.
    The cognitive function shown above is rather similar to that of 5 year old boys putting sticks in dog poo on the playground .


    Good on Delta for honoring their word, and likely also getting a good price on assets they will own and use for 20+ years.

  4. So taxpayers are handing money to Delta to facilitate the completion of their partnership? Nice.

  5. Outrageous that they aren’t buying American since they are now in essence a nationalized airline.

  6. Wait, so these readers are suggesting they would rather fly in a Boeing? Like which ones?
    The 737MAX? Well cant fly that one as its been grounded by lies and fraud that lead to mass murder.
    The 787? Well which ones, the ones made in SC with all the nail filing waiting to cut the critical controls under the floor boards? Or maybe the ones with extra ladders stuck in them? Want a Washington State one, well, you gotta wait because that is the only one many airline customers will accept and the wait is long….
    Oh, maybe something else the one great aircraft manufacturer currently makes?
    Now that Boeing is run like and by GE executives we all know where its headed and it aint up and away.
    Just like GE its a composite of lies and crashing stock prices.
    Even before the virus it was Boeing was a fraud.
    https://prospect.org/power/boeing-is-basically-a-state-funded-company/

  7. The comments here are hilarious.

    Delta owns a huge stake in LATAM. Delta had already announced as part of the deal to buy said stake that they’d be taking over LATAM’s order. This move has been known for something like 6 months. It’s not exactly a surprise. It will be years before Delta takes delivery of and pays for these planes and COVID-19 will be a distant, if unpleasant, memory by then. Had they not accepted the order, and cancelled instead, they’d either be sticking LATAM with the order or sticking LATAM with the cancel fees. And, lest we’ve forgotten after 2 paragraphs, they *own a huge chunk of LATAM,* and would thus be risking a lot more than the value of this order.

    As far as the blathering about 767s above, the 767s that Delta is retiring have reached the end of their useful service life for Delta. Maintaining them to Delta’s standards gets to be more expensive as they age. Their newer 767s will be around for quite some time to come and they’ve already updated the interiors of the 764s, which they’ll continue to fly.

    I also don’t quite understand the comments about the A350 already being too big for the routes it was flying. The A350s are mostly flying routes that Delta previously flew (quite profitably) with 747-400s.

  8. People are so dumb and don’t understand aerospace supply chain, subcontracts and materials. Yes Airbus final assembly is in France and Boeing is in Seattle but most Boeing parts are global including mostly foreign parts and most Airbus parts are global including major American content. Probably nearly a million US jobs are paid for by Airbus components.

  9. Delta placing an order really doesn’t mean much; only if they were accepting delivery of planes from any manufacturer, would it be a story

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