Saturday, January 6, 2018

My Thoughts: Boeing Leader Predicted Delta Airbus A321 Order – Could It Doom “New 757?”

Delta 757 on approach

A Delta 757 in the Sky Team livery on approach to Seattle-Tacoma International Airport

The recent announcement by Delta Air Lines that it will be ordering 100 new Airbus A321neo jets could put a nail, or perhaps rivet, into the coffin of a 757 replacement.

I knew this Delta announcement was coming years ago when I was working for Boeing and had an insightful chat with a very high-ranking Boeing executive. The chat was not in a public forum, so I will not say who it was, but trust me – this person knew what he was talking about. He told me that he felt Delta may never by from Boeing again. He went on to talk about how Delta’s former CEO, Richard Anderson, and its current leadership, was pretty much married to the French conglomerate

Prior to Delta, Anderson made a couple of big Airbus purchases while heading Northwest Airlines. Delta’s entire A319, A320 and A330 fleet comes from Northwest. So what’s this have to do with the flirtation of a new 757?  Delta is far and above the biggest 757 user with 128 757s, a total that was boosted after the 2008 merger with Northwest Airlines. United’s the next-largest passenger carrier at 77 and American is third with 52. The aircraft is still popular in the US, but not as much overseas.

Icelandair 757's at Sea-Tac Airport

Icelandair’s specially painted 757s. The airline has 28 757s – the backbone of its trans-Atlantic flights.

There is obviously a demand and it’s not a secret. For several years, Boeing’s sales honchos liked to fuel talk of a new and improved 757. These folks talked about “studying the issue” about as much as Cleveland Browns fans talk about winning a single game. Meanwhile, Airbus is doing its best Tom Brady impression by racking up championship rings – thousands of A321 orders and deliveries. Now, Delta has just spiked the football with this big A321 order.

It’s widely known in the airplane sales industry Airbus can literally give planes away, with the carrot that the purchasing airline then remain an Airbus customer for future orders. Boeing’s strategy is to provide a quality product and charge more for it, contending their in-service performance is better than Airbus, so a more expensive plane that isn’t in the maintenance shop is ultimately better for airlines.

This A321 order goes beyond just Delta. The airline also owns 49 percent of both Virgin Atlantic and Aeromexico. It has a ten-percent equity and a board seat with Air France-KLM, 9.5 percent of Brazil-based GOL, and 3.5 percent of China Eastern. By the time this is done, Delta may try to buy part of me – but I’m not selling out unless they bring back those yummy honey-roasted peanuts! Delta’s checkbook is now a worldwide power and its influence over joint venture partners could spell even more orders for Airbus and the A321.

Delta 757

A 757 charter at Seattle-Tacoma International Airport, carrying football’s Minnesota Vikings

Personally, I love this plane. Ask any pilot (I often do) and they’ll say the 757 is a dream to fly, which performs better than both the 737 and A321. Sure, they’re biased, but 757 pilots I talk with say it’s the best plane Boeing has ever made. Aside from the legendary 747, the 757 is the most visually unique airplane Boeing has ever made in my view. It’s long and lean with an impressive wingspan. It’s a plane I chose to pay a little higher airfare for, just to take on my long-ago honeymoon. I’ve also flown it on a trans-Atlantic route to Berlin from Newark, and many times domestically.

Could there still be some form of new middle market Boeing airplane? Never say never. The big question for cost-cutting Boeing would be where to build it. Internally, Boeing considers Washington a “high cost” state, having cut around 20,000 jobs in the past five years. Expanding Boeing’s South Carolina or St. Louis operations won’t be quick turns.

Delta’s order shows the A321 has gobbled up the 757’s old market and Boeing might be too late. The 787-8 provides a market just beyond the 757 and the Boeing 737 MAX 9 and MAX 10 come up short with  distance and capacity. So Boeing will need firm evidence of a market that’s still out there for any new plane.

So 757 fans, enjoy it while you can. At least one consolation for “Made in the USA” supporters – newer A321s are being built in Mobile, AL – ironically not far from Delta’s Atlanta headquarters.

The post My Thoughts: Boeing Leader Predicted Delta Airbus A321 Order – Could It Doom “New 757?” appeared first on AirlineReporter.

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