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 a 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.

Brett

15 responses to “Don’t Expect to See 787s in Delta Colors Anytime Soon”

matt weber

Oct 27, 2010

The A350-1000 at this point is vapor ware, and there are many in the industry with serious reservations that it can be delivered anywhere the specification performance. I believe Marice Flanagan (Emirates) is quoted as saying: ‘It is a great airplane, if they can actually deliver it’.

Let’s be honest, EADS has had a terrible time of late delivering aircraft that met specifications. The A340-500, A340-600,and A380’s are all seriously overweight and, and significantly underperforming. Emirates was so unhappy with the A340-600 that they cancelled all of theirs!

At this point the 787 is also significantly overweight (apparently enough so that there was some question if the early examples NW was supposed to get could actually operate the missions NW had planned for them), although by how much, and at what point in the production cycle that will be addressed is unknown.

The big problem with the 787-10 is the engine. It is going to take a major re-work of the GEnx engine to reach the 90,000 pound class that will be required for the -10. and as long as the 777-300ER is selling very well, there isn’t a lot of incentive to replace it (Although interestingly enough Cathay Pacific is pushing Boeing to offer an improved 777-300ER).

Anyway I think the 787-10 is on the ‘back burner’ until Boeing is out of the thicket on the -8 and -9, and that is probably still a couple of years off.

My opinions anyway.

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David SF eastbay

Oct 27, 2010

With all the delays the 787 has had, you would think Boeing was a new company trying to make an airplane. Doesn’t look good when you make promises you can’t keep.

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DGS

Oct 27, 2010

I get the feeling that Delta is going to ride the 767s into the dirt, as they (or NWA) are doing with the DC9s. They’re scheduled to have a brand new interior by 2013, so they should be good for another decade. The higher costs for fuel burn should still be a huge advantage over the cost for shiny new planes.

I would assume that if Delta decides they want 787s sooner, they won’t have any trouble cutting back in line.

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1. Jason H
  
  Oct 27, 2010
  
  What’s wrong with that strategy? Sure a shiny new plane is nice, but it is expensive. Right now DL outright owns the DC9s and several of the 767s. That translates to much lower hull costs and allows them to fly routes that otherwise wouldn’t be profitable. Besides, the 767s aren’t terrible aircraft and if they had better cabins for the TATL flights they would be competitive with some of the other airlines flying less modern interior.
  
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  1. DGS
    
    Oct 27, 2010
    
    I probably wasn’t clear, but that was my point. To most consumers, they really don’t care about the make/model of the plane. Once Delta refurbishes the interior, they’ll be just as good or better than competitor’s cabins.
    
    Given that Delta deploys the 767s mostly on TATL, they won’t get much out of the 787s superior range. Fuel burn will be the difference, and as stated, that is outweighed by the acqusition costs of new planes.
    
    Unless Delta wants to go for a major expansion in Asia (overflying NRT), they can hold off on new planes until 2020 or so.
    
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  2. JamesK
    
    Oct 27, 2010
    
    Yes, but the maintenance costs are higher on the older aircraft, especially as parts get harder and harder to find. There will come a point where the fuel burn plus maintenance costs will get too high, but I agree with DGS that the 787 doesn’t really fit for any missions Delta wants to fly.
    
    Like Northwest, Delta has a proud history of flying types almost until the wings fall off (DC-8, L-1011, 727, etc).
    
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    1. Jason H
      
      Oct 27, 2010
      
      And I like that business strategy. Additionally, DL has a strong maintenance base that services USAAF aircraft like the executive 737, 757, and 767 fleets. Those planes can’t be services outside of the US, so until the government replaces those fleets the parts will still be around.
      
      Additionally, wing mounted engine aircraft can be upgraded to newer engine technology much easier than the DC-9’s. So some of the fuel burn differences can be mitigated.
      
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      1. Nicholas Barnard
        
        Oct 27, 2010
        
        Putting newer engine technology on an airplane is not just a matter of taking one off and putting another on. Airplanes and engines are certified for one another. With the exception of the 787, most modern airliners require that the plane be equipped for the engines that are on it. You can’t just take P&Ws and put on GEs or vice versa.
        
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      2. Jason H
        
        Oct 27, 2010
        
        @Nicholas –
        
        Agreed, but if you have a chance to reduce fuel burn on a paid for 25-year old TATL aircraft you might go through the certification process. Additionally, the later 767 and 777 are multi-engine manufacturer certified, but the airline might still have to go through new procedures. Still, cost and delivery slots might make it a better decision.
        
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Christophe

Oct 27, 2010

@ Cranky : you state that “Way back in 2005, Northwest ordered 18 787-8 airplanes for delivery during 2008-2010” and therefore conclude that the delay by Delta is huge.
But what was to be the new timeframe of those deliveries ? How much backwards are they really pushed ?

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1. CF
  
  Oct 27, 2010
  
  I’m not sure if a new delivery date had been agreed upon after the delays. Anyone know? If you assume a 2 to 3 year delay, first deliveries would have been in the next year.
  
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Daren S

Oct 27, 2010

Given the huge backlog of planes on order for the 787, is there be a market for airlines to sell their orders to those further down the list, if such a thing is possible? Also, I am slightly surprised by this given Delta’s push to world dominance by flying to many more far-flung places that may not be able to justify flying a 777, which I thought was the point of the 787.

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dan powers

Oct 27, 2010

the 787 may be like the DC-3…airlines that do not have it will go out of business….so a 787 in delta colors is just a matter of time…for now the balance sheet looks better if no big orders are on record..

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Consumer Mike

Nov 1, 2010

For you folks that use Delta/NW you may be interested in the latest DOT Air Travler Consumer Report which documents that DELTA has the worst all around record of ANY airline in the last 6 – 12 months. It appears that DELTA still has a long way to go in order to be customer friendly. Too bad they don’t get the message!

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Danny Markfeld

Dec 7, 2010

Boeing could face bankrupt if they lost more of 847 Boeing 787s before Emberaer, Tupolev, Yakovlev, Antonov, and Lockheed will be taken over the course of new planes to build something light with more powered boosters than the 787s. The 787s might be cancelled forever and ever due to production failure and it might come to an end before those companies taken over the courses after all 847 orders were too much heavy. As the 787s was too heavy to fly forever and ever.

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