Blogbombardier is close to closing deal with delta
Bombardier is Close to Closing Deal with Delta
On April 15th, 2016, Airways News released a new article about how Bombardier is close to selling up to 125 Jetliners to Delta international Air Lines in the near future. Airways News for their information from Jon Ostrower and Jacquie McNish from The Wall Street Journal. Delta Airlines, the number two U.S. airline, has been very eager to close deal with Bombardier manufacturer.
Delta Airlines plans to replace its old fleet of McDonnell Douglas MD-88 jets as they only have single aisle seating. Because Delta wants to transition to taking on more regional routes, the single aisle seating would not work, where as Bombardier’s jetliner will accommodate for this need.
Here’s what Ed Bastian, Delta Airlines’ incoming chief executive, talks more about this. “the MD-88s do need to retire, and we have roughly 115 of them.” Delta is putting their attention on a five year renewal of its domestic fleet. Bastian will have more information on the company and its direction during the investor meeting that is held sometime in May in New York.
If this deal is completed, Bombardier will have sold over $5 billion up to $6 billion worth of inventory, based on list prices.
It seems like Bombardier has been competing with Boeing and Airbus Group SE for quite a while but now as it stands, Bombardier is in the lead to close on Delta. However even with this big deal, analysts have shown that there is a potential that buyers will demand price cuts and very stringent contract terms.
Although no final decision has been made, if Delta decides to go with Bombardier here’s what they plan to do. Delta would purchase 75 orders of the jetliners with option to order 50 more by the tail end of April.
With many airlines transitioning to other types of seating other than the single seating jets, Bombardier is taking a hit. Here’s what Ostrower and McNish have to say.
“Bombardier’s foray into the 100- to 160-seat single-aisle jet market has left it with a heavy debt load after repeated delays and technical setbacks. The aircraft will enter service with Swiss International Air Lines, a unit of Deutsche Lufthansa AG, in June, roughly 2½ years later than first intended.”
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