Delta Returns to Airbus for Its First Airbus Buy in 20 Years
Delta Air Lines is expanding its air fleet. On Wednesday, Delta announced plans to buy 40 new Airbus aircraft for delivery between 2015 and 2017. The planes in question will include 10 wide-body A330-300 airplanes and 30 narrow-body A321 jets.
At Airbus' published list prices (which customers don't usually pay), this order would be valued at approximately $5.6 billion.
Few airlines actually pay list prices, especially on large orders like this one. Delta CEO Richard Anderson was quoted in the company press release as calling the purchase "another opportunistic fleet transaction for Delta."
Delta CFO Paul Jacobson noted in the same press release that "these Airbus aircraft will generate free cash flow and improve our return on invested capital from the time they enter service."
In its announcement of the deal, Airbus pointed out that this was Delta's first purchase from it since Delta placed its last Airbus order "some two decades ago." Airbus noted that in combination with the fleet of Airbuses inherited from its purchase of Northwest airlines, Delta now operates 126 Airbus A320 Family aircraft and 32 A330s -- numbers that will grow with this latest order.
Airbus further pointed out that "many of Delta's A321s are expected to be assembled at the brand-new Airbus assembly line in Mobile, Alabama, currently under construction and scheduled to deliver its first aircraft in 2016."
Delta is buying a version of the A321 that is being phased out in favor of a "new engine option" that Airbus plans to begin delivering in 2015. The new version is more fuel-efficient and has been getting the bulk of new orders. But the old version that Delta is buying costs $10 million less per plane.
-- Material from The Associated Press was used in this report.
The article Delta Returns to Airbus for Its First Airbus Buy in 20 Years originally appeared on Fool.com.Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.