Don’t Expect to See 787s in Delta Colors Anytime Soon

Though Delta has never ordered the Boeing 787 itself, it did inherit 18 firm orders for 787s when it merged with Northwest. There had been Delta 787a lot of speculation about what would happen to those airplanes post-merger, and now we have some resolution. Delta and Boeing have agreed to delay delivery until 2020. That’s right, 2020. I think you can consider this a cancellation for the 787-8 version, but my bet is on this morphing into something for a larger version down the road.

Way back in 2005, Northwest ordered 18 787-8 airplanes for delivery during 2008-2010. As we all know, the 787 has suffered through 3,483,048 different delays. The Northwest order should have been mostly delivered by now, but Boeing hasn’t delivered a single 787 airplane to anyone yet. That delay combined with Northwest’s merger with Delta put the order in limbo.

There was only speculation until Delta released in its most recent 10-Q that it would defer delivery until the 2020-2022 timeframe. Seriously? I’ve seen deferrals, but that looks more like a cancellation to me. “Let’s just push this thing out and maybe Boeing will forget about it,” right?

So why bother deferring that far and not just cancelling? We don’t know the details of the contract, but Delta might not have had the option to cancel. Of course, with the constant delays, that makes any cancellation easier. But my guess is that Delta is positioning itself to switch to another variant when it becomes available.

The 787-8 is the smaller of the two long haul versions of the 787 (forget about the short-haul 787-3 designed for the Japanese market). It is expected to seat about 225 people in a three-class configuration while the 787-9 would seat 280. What many airlines are interested in is the often-discussed 787-10 which would seat over 300. This version hasn’t been launched primarily because Boeing wants to protect the 777-200 from cannibalization. That’s not showing to be the best plan.

Airbus has the A350-1000 which will seat upwards of 350. That’s easy for Airbus to do since there is no real existing offering to compete with the 777. But by delaying the 787-10, Boeing runs the risk of losing orders to Airbus (as it did with United when it opted for the 787 and A350 to fit its needs). Besides, it’s not like anyone is really ordering the 777-200 anymore. Most of the growth is in the 777-300.

So my guess here is that Delta is holding out hope that the 787-10 gets launched at some point in the next decade. Then it can switch its orders to the larger airplane and still be in a prime spot for delivery when it’s ready for the airplanes. This is all speculation of course, but it seems the most likely scenario.

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