There was some talk that Delta Air Lines might order a Boeing 737 MAX. This airline is the only one of the four major US carriers to not have any 737 MAXs within its fleet. This is an interesting update that we haven't heard about in a while.
Delta is in negotiations with Boeing 737 MAX
Airline Weekly has some comments by Ed Bastian, Delta CEO, this week regarding the Boeing 737 MAX. Bastian claims:
He said that [the MAX] is definitely a possibility if we can find a way to bring them in
He said that there was no news, but they were always talking to Boeing.
He was surprised that Delta and Boeing have not reached an agreement regarding these jets.
Delta is an aircraft buyer who has been opportunistic for a long time. However, this strategy has been different than that of other major airlines in the United States.
Delta will gladly buy and operate used aircraft. They also offer a longer flight time than other airlines. Used planes are often less expensive than new ones. The interiors of used planes are well-designed so customers don't feel like they are flying on an old plane.
Delta looks for great deals when buying new aircraft.
Delta recently purchased some Airbus A350s in used condition
It's no surprise that Delta didn't buy the 737 MAX for a long period of time. American and Southwest faced a huge challenge when the plane was grounded after two fatal crashes. They had to drastically reduce their capacity. This is no longer true with the 737 MAX flying again.
Is Delta going to need the Boeing 737 MAX
It seems that Delta would require the Boeing 737 MAX at some point in the future. Delta is willing to fly older planes, so the need may not be as urgent as other airlines. However, Delta's small body fleet is a great example of this.
Delta currently has 95 Airbus A220s in order. These will more than replace the 53 Boeing 717s. Moreover, Delta recently retired all its MD-80s which resulted in a significant reduction of capacity.
Delta currently has 127 Airbus A321s in order (only a handful have been delivered). The airline also has 155 Airbus A321neos in order. These will more than replace the carriers' 127 Boeing 757s.
Delta currently has 113 A319s/A320s. They are well over 20 years in age, so they will need to be replaced.
Delta currently has 77 Boeing 737-8800s and 159 Boeing 737-9000ERs in its fleet. These aircraft are on average over 10 years old.
A 737 MAX order would replace the aging A319s or A320s as well as other 737s. The other 737s don't need to be replaced just yet due to the length of time Delta planes are kept for.
Delta owns a large fleet of Boeing 737s
Why hasn't Delta ordered the 737 MAX instead?
Bastian said that he was surprised that Delta hadn't reached a deal for 737 MAXs. So why is this not happening? We can only speculate, but it seems like it boils down to price.
Both Ryanair and Delta are known to be in search of a deal when buying planes. Ryanair, like Delta, has been in talks with Boeing for a while about an additional 737 MAX purchase. A few weeks ago, it was announced that negotiations between Ryanair and Boeing had been canceled due to inability to reach a deal. It was described by Ryanair CEO Michael OLeary:
We were disappointed that we could not reach an agreement with Boeing regarding a Max 10 order. Boeing has a better outlook on aircraft pricing than us, and they have a track record of paying low prices for aircraft.
It seems like it is the same story at Delta. Given the terrible few years that Boeing had, you would think they would be desperate to find deals. It is unlikely that Delta will reach a deal with Ryanair if they don't.
Delta may have one advantage over Ryanair in terms of negotiating, however:
Boeing is well aware that Delta would be happy to place an Airbus order and has ordered large quantities of A321neos.
Ryanair operates only Boeing 737s and is focused on fleet commonality. Boeing believes Ryanair would not consider purchasing Airbus aircraft.
Ryanair recently canceled 737 MAX purchase negotiations
Bottom line
Although it does not seem that anything is imminent, Delta is reportedly still in negotiations with Boeing about the 737 MAX. Although I believe that Delta will place an order eventually, I wouldn't be surprised if it takes some time.
Delta is well-known for seeking out deals on planes. It seems that Boeing doesn't want to offer a bottom-of the barrel price on 737 MAXs. Based on Ryanair and Boeing not being able reach an agreement on price, I believe that this is the case.
Are you positive that Delta will order Boeing 737 MAXs from Boeing?
