Delta Shuns Boeing Dreamliner, Buys Airbus Ordinary-Liner
ATLANTA ( TheStreet) -- Call Delta
While other carriers line up to buy the newly introduced Boeing
"If everybody behaved like Delta, the boom jetliner market would collapse," said Richard Aboulafia, vice president of consulting firm Teal Group. "Everybody else is in an arms race, and Delta is doing the exact opposite." Delta, it appears, does not suffer from "FOMO," the fear of missing out. Its first 787 is due to arrive in 2020 and it does not have an A350 order.
Aboulafia called Delta "contrarians in the jet business -- possibly genius contrarians" and said "they have turned the accepted logic of the business on its head. While everyone says the key to international passengers is 787s, Delta says 'No -- why not put lie flat seats in old 747s?' Passengers don't care about high tech jets, they care about lying flat. I think these guys are dangerous geniuses."
Avoiding the industry's most fashionable products enables Delta to avoid paying high prices. "You can get incredible deals on current generation jets," Aboulafia said. Analysts say that every single customer gets a discount and preferred customers such as Delta can get 50% discounts. List prices are about $107 million for an A321 and $239 million for an A330-300. Delta also looked at comparable Boeing aircraft, the 737-900 and the 777-300.
Analyst Scott Hamilton of Leeham Co. said Delta "didn't want to be among the leading recipients of new technology," adding, "you can buy a lot of fuel for a cheaper airplane and not take the technology risk just yet." Technologies like the 787 and the engines on it and on the Airbus 321Neo are still proving themselves, he said. "Delta wants to see engines in service for a while before they commit."
As for American