Airbus (EADSY, Financial) and Boeing’s (BA, Financial) battle for supremacy in the aviation market is never ending. In one such similar event, European plane maker Airbus bagged a crucial order from Delta Air Lines (DAL) for A330neo and A350 which is valued at $14.3 billion at list price, which does not account for the discount offered by the plane maker. This is an essential deal for the player as Boeing dominates the wide-body market and this order would give Airbus a boost.
The deal in details
Delta is the third largest carrier by traffic in the U.S. This clearly shows that the order win from the U.S. operator is a big matter for the French manufacturer. Delta has placed orders for 25 long haul A350-900s and 25 A330-900neo, said a person familiar with the matter.
Through the orders for the A330neo and A350, Airbus would be able to expand its market share in the wide-body space. The company had announced the A330neo program at the Farnborough Air Show that took place in July, and it’s raining orders for this plane. The aircraft is a re-engineered version of the popular A330 plane. The upgraded aircraft would sport Rolls Royce engines. Adding news engines have helped Airbus to extend the product life cycle of the plane.
On the other hand, the A350 is about to enter service the next month with the first delivery going to its launch customer, Qatar Airways. Airbus is extremely hopeful about these two planes and expects good number of orders to come for it. Both these aircraft boast of greater fuel efficiency over existing planes. On being question regarding the Delta orders, both Airbus and Delta refused to comment.
The battleground gets fierce
Delta had disclosed its plan to buy 50 long range planes back in April this year as it was looking to substitute the fleet of Boeing 767-300ER and the 747-400 jumbo jets. The operator was weighing both Airbus and Boeing options. The airline was comparing the A350 and A330 with the 777 and the 787 Dreamliner. Finally the Atlanta based operator chose Airbus A350 and A330 over Boeing’s offerings. However, it still has orders for 18 Dreamliners that was bought by Northwest Airlines in 2005 after which it combined with Delta. However the deliveries of the same have been postponed to 2020 after series of production problems that led to delays.
Last month executives from Delta said that they were evaluating the two plane makers’ offerings and assessing the engines that they gave. The company already flies several A330s. The orders bagged by Airbus is an opportunity loss for Boeing.
