Delta Air Lines said on Thursday it ordered 100 Boeing Next-Generation 737-900ER planes valued at USD$8.5 billion as it looks to replace older aircraft with fuel-efficient models.
Delivery of the 180-seat aircraft, which offer 15 to 20 percent better fuel consumption per seat, will run from 2013 to 2018. Delta said the planes, which will be operated on domestic routes, had committed long-term financing.
Delta is retiring older, less efficient aircraft and reducing flights in areas where revenue is not keeping up with rising fuel costs. It is also investing in new seats and better food to boost revenue.
The carrier said the 737 aircraft it is ordering will have lower unit costs than the older Boeing 757 and 767 and Airbus A320 models they will replace. The new planes will be Delta’s first with Boeing’s new ‘Sky Interior’, which includes expanded carry-on baggage space and an LED lighting system.
OIL AND ORDERS
High oil prices are spurring orders worth billions of dollars for fuel-efficient aircraft, spurring the rivalry between Boeing and Airbus, the two biggest plane makers.
Last month, American Airlines split a record order for 460 single-aisle aircraft between the two companies, ending its exclusive relationship with Boeing.
The Delta buy is “a win for Boeing,” said Alex Hamilton, managing director with EarlyBirdCapital. He expected more orders from US airlines.
Atlanta-based Delta sent a request to aircraft makers last year for proposals to deliver up to 200 planes, with options for 200 more, to replace older narrow-body models. Delta has a fleet of more than 700 aircraft.
The airline had said it was talking to manufacturers, including Brazil’s Embraer and Canada’s Bombardier, as well as Boeing and Airbus. Chief executive Richard Anderson said in Delta’s statement on Thursday that “several very competitive proposals” were received.
Embraer said this week it does not expect Delta to make a decision about a potential order for smaller regional jets for at least a year.
The Boeing 737-900ER is the newest member of the Next-Generation 737 aircraft family. The planes will be equipped with engines made by CFM International, a joint venture between General Electric and France’s Snecma.
Boeing, based in Chicago, is planning to update its best-selling 737 with a more fuel-efficient engine.
Delta will start taking deliveries in two years, with 12 aircraft expected in 2013, 19 aircraft yearly between 2014 and 2017 and the remaining 12 planes in 2018.
Boeing’s weekly order update on Thursday featured the Delta order, as well as two new orders for 777 wide-bodies.
Boeing also lost orders for six 787 Dreamliners in the latest week. The long-delayed 787 is due to receive certification from the Federal Aviation Administration on Friday.