Delta talks to Boeing, Airbus about new planes

In what would be its first major aircraft order in a decade, Delta Air Lines says it's in preliminary talks to buy about 125 widebody jets from Boeing or European plane maker Airbus.

The Atlanta carrier is in the "look and understand phase" of comparing Boeing's new 787 jetliners with Airbus' A350 --- both midsized widebodies suited for overseas routes --- to replace its fleet of 104 Boeing 767s, Delta Chief Operating Officer Jim Whitehurst said.

Speaking by phone from the Paris Air Show, Whitehurst said the "odds are better than even" that Delta will place a long-term order by the end of the year to begin taking delivery around 2013. The last large jets Delta currently has on order are scheduled to be delivered in 2010.

Delta's last major jet order occurred in 1997, and the financial hard times of recent years forced it to scuttle or delay some deliveries. The '97 deal ostensibly committed Delta to Boeing for 20 years --- a fact that drew bitter criticism from Airbus at the time --- but Whitehurst said it had enough flexibility that Delta can invite Airbus to make a proposal now.

However, aviation analyst Richard Aboulafia, of Teal Group, said he doubts the Airbus plane will be a serious contender.

He thinks Delta will look at both in order to try to get better terms from Boeing.

"Delta really can't afford not to have [the 787] or its equivalent, and right now there's a lot of uncertainty about its equivalent," he said, referring to the A350.

All of Delta's current mainline jets are from Boeing or former rival McDonnell Douglas, which merged with Boeing.

Boeing headed a key court-appointed committee of Delta's creditors during the airline's bankruptcy case.

"We have a great relationship with Boeing," Whitehurst said, but "we owe it to our shareholders to make the best deal."

He said landing an order is "more of an uphill climb for Airbus" but suggested that Airbus jets may have a better shot this time because Boeing's 787 won't have many parts in common with Delta's current fleet.

"That's a real competition," said Whitehurst.

Delta has been rapidly expanding its overseas operations to try to reduce its dependence on less profitable domestic flights, where discount carriers such as JetBlue and AirTran have driven down fares.

Much of the international push has come from rerouting its long-range 767s from domestic flights.

But some of the 214-seat jets will be hitting the typical retirement age of 25 years in a few years, Delta said.

Boeing says its 210- to 330-seat Dreamliners, as the 787s are called, will offer about a 20 percent fuel savings by using lighter composite materials than all-aluminum jets.

Airbus likewise says its A350 will use lighter materials to save fuel. However, the 270- to 350-seat jets aren't expected to be available until 2013. Boeing's order books for its 787 are full into the next decade as well, but Delta hopes it could negotiate to get some planes earlier.

Whitehurst said Delta has no immediate plans to find a replacement for another group of aging jets, its McDonnell-Douglas MD-88s.

He said Delta will wait to give Boeing and Airbus time to develop "next-generation" versions of their narrow-body jets.

"We don't need to make that decision for the next couple of years," he said.

A spokeswoman for Airbus North America declined to comment on any talks with Delta but added that the European aircraft manufacturer will do well in any competition with Boeing.

"We've got a good quality product to offer," said Kristi Tucker, with Airbus. "I don't think we're a stalking horse at all in any competition."



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