Delta Just Ordered the 797…sort of

delta is the world's second largest airline both in terms of fleet size and in the number of passengers it carries so any time it places an order for a new plane it's bound to make some noise it's recent order for an absolute boat load of 737 max 10s is no exception as it's the largest order boeing's received in years but more important than the deal size is the impact it will have on both boeing and delta's future because below the surface this deal is an implicit endorsement of the yet to be launched 797 and it shows delta will be the very first in line once it's available let me explain before hopping into the video did you know that you're probably overpaying for flights that's because many booking websites track your online activity they know exactly where you want to fly and when if you look at a flight one too many times without buying these websites will start to raise the price this builds artificial urgency worried that fares may go up further you end up purchasing before you're ready but with the help of today's sponsor nordvpn you can browse in peace nord protects all of your online activity shielding you and your search history from prying eyes nord also masks your ip address so snoops don't actually know what country you're in did you know that here in the us every flight is subject to a 911 security fee that's not the case in other countries and by masking your location with nord you can avoid these fees and save even more on flights for a limited time my subscribers can get a huge discount on a two-year plan plus earn an extra month free and a 30-day money-back guarantee simply head to the link in the description so you don't miss this amazing deal first let's talk about the history of delta's fleet until recently the airline was a champion of american-built jets through the early 2000s the carrier flew nothing but boeing and douglas aircraft say for a brief stint flying the a310 in the early 90s but that began to change in 2008 when delta merged with northwest northwest flew a fair number of airbus jets and the acquisition marked a significant change in delta's relationship with the european jet maker over time delta grew quite fond of the a320 and a330 and piece by piece delta slowly transformed its fleet from american focused to european focus today two out of every five jets in delta's fleet are of the airbus variety now it's clear boeing's lost some ground here but on the surface it doesn't seem like that big of a deal they still make up the majority of delta's existing fleet but when we take a closer look at delta's future fleet the outlook for boeing appears much more grim over the past decade delta hasn't ordered a single boeing jet while signing up for over 300 airbuses and as these airbuses are being introduced more and more boeings are being phased out with delta set to retire 127 767s and 717s by 2025. on top of that delta's been downsizing its 737 fleet and caught everyone by surprise when it retired its triple sevens a few years back given this pattern of behavior it doesn't take a genius to realize that delta is shifting towards an all airbus future but despite this major shift there is one boeing jet that the airline stubbornly refuses to get rid of the 757 now i've already done a whole video on delta's complicated relationship with the flying pencil and i'll be sure to leave a link to it right below that like button i highly recommend you check it out but here's a super quick synopsis delta 757s are quite old averaging 25 years in age however it's been reluctant to phase them out because it is arguably its most important plane now this reluctance continues to surprise many after all airbus already has a perfect 757 replacement in the a321xl and rivals like united and american have already signed up for the type but for whatever reason even though delta favors airbus they just don't seem all that interested in the plane and frankly we don't exactly know why this bizarre situation offers a glimmer of hope to boeing one last chance to save its relationship with delta if boeing could simply get its act together and build its own 757 replacement ostensibly called the 797 it would have a real chance of rebuilding the partnership and as a matter of fact delta leadership seems on board with this idea as recently as 2019 delta ceo ed bastian expressed interest in buying up to 200 of the type the problem though is that boeing has dragged its feet ever since in 2020 boeing ceo david calhoun said early 797 designs were being scrapped and the program put on the back burner the company just didn't have time for it needing to focus all its attention on fixing the beleaguered 737 max and triple 7x now this was probably the right move for boeing it really needs to get its ducks in a row before building an all-new plane but the announcement also seemed to close the door on a partnership with delta without a good idea of when the 797 might arrive and with a 757 fleet that's only getting older by the day conventional wisdom says it's time for delta to acquiesce and just buy the xlr instead and that's what makes this order for the 737 max so interesting because it completely flies in the face of that logic to better understand why let's play out two scenarios one where delta buys the xlr and one where it waits for the 797 with option 1 delta essentially cements itself as an all airbus shop at that point the airline begins seeing massive benefits from fleet commonality it would then be pruned for delta to steer clear of all boeing jets otherwise those benefits won't be realized but by ordering the max delta is obviously not steering clear this means scenario 2 is much more likely delta will hold out for the 797 no matter how long it takes the max will serve as an excellent stop gap until the 797 arrives keeping both delta pilots and technicians up to date on the latest boeing technologies what's more ordering the max puts the pair back on good terms earning delta greater influence over what the 797 will eventually look like since delta is taking this path it must mean that the 797 is just over the horizon right well actually no david calhoun recently reaffirmed that boeing's still in no rush to build it and estimated they're at least two years away from program launch ultimately engine technology just hasn't improved enough over what we see in the leap and pw1000 engines that power today's narrow bodies and boeing wants to be absolutely certain that the 797 is much more performant than the a321xlr or else it may struggle to sell all in all we're probably looking at the mid-2030s for first 797 delivery so then how exactly is delta going to manage after all by the mid-2030s their 737 fleet will be nearly 40 years old well they can piecemeal a couple of solutions together to help bridge the gap the first tactic involves swapping some 757s with these new 737 max 10s and recently acquired a321 neos both of these planes match the 757 in capacity so they can serve as fine replacements for now but neither plane matches the 757s range that means delta has no choice but to keep a few dozen 757s on hand to operate longer routes while it would not be sustainable for delta to fly its whole 757 fleet for another decade keeping around just a few should be alright the jet's a bit of a gas guzzler sure but it's not that expensive to maintain delta has one of the best maintenance networks in the world and has gotten exceptionally good at streamlining 757 repairs ultimately delta might be the only mainline carrier who can keep flying the plane for another decade without it being a burden on overall profitability at the end of the day this 737 max order is a monumental win for boeing to state the obvious it's gonna make them a ton of money up front to the tune of tens of billions of dollars but more importantly it's going to make them a lot of money in the long run breathing new life into the 797 and rekindling a partnership with delta that seemed like a lost cause and you best believe that once the 797 is ready delta will be there cash in hand so what do you guys think is it smart for delta to hold out for the 797 or should they just go with the xlr let me know your thoughts in the comments section below and again if you haven't done so yet i highly recommend you check out the companion video on delta's relationship to the 757 there's a link to it in the description and i'll leave a link to it right here thank you so much to my patrons for helping to make this video possible if you like what i do and want to help the channel grow go ahead and check out this link right here and as always if you learned something new today leave a like and subscribe to keep learning and until i see you again don't forget to look up [Music] you

Channel: Coby Explanes

Views: 978,170

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Id: 0bfkxN_7d3E

Length: 10min 22sec (622 seconds)

Published: Fri Aug 05 2022