Delta Cancels $4 Billion Boeing Order Inherited From Northwest

© Paul Sancya/AP In this Jan. 21, 2010 file photo, a passenger walks past a Delta Airlines 747 aircraft in McNamara Terminal at Detroit Metropolitan Wayne County Airport in Romulus, Mich.

Delta Air Lines Inc. scrapped an order for 18 Boeing Co. widebody jets valued at $4 billion at list prices.

The 787-8 Dreamliners had been on Delta’s order book since its 2008 merger with Northwest Airlines. The Atlanta-based carrier said it had reached an agreement with Boeing on the cancellation, without disclosing terms. It will continue orders already in progress for 120 narrowbody Boeing 737-900ER, Delta said in a statement Tuesday.

“This business decision is consistent with Delta’s fleet strategy to prudently address our widebody aircraft needs,” Greg May, Delta’s senior vice president of supply chain management and fleet, said in the statement.

The cancellation furthers a trend of major U.S. airlines either deferring or canceling orders of widebody jets, the long-haul aircraft that have two aisles. Delta earlier this year deferred taking four Airbus Group SE A350s until 2019 and 2020, instead of the originally scheduled 2018. The 787s have a list price of $224.6 million, although large discounts are customary for major airlines.

“We’ve been working closely with Delta as their needs have evolved since inheriting the order from Northwest,” said John Dern, a spokesman for Chicago-based Boeing. “Delta is a valued customer and we continue working with them to meet their future fleet requirements. Customer interest in the 787 continues to be strong, with almost 1,200 orders to date.”

Delta to cancel order for 18 Boeing 787 Dreamliner aircraft

Delta Air Lines Inc (DAL.N) said on Tuesday that in agreement with Boeing Co (BA.N) it would cancel an order for 18 787 Dreamliner aircraft, which it assumed as a part of its merger with Northwest Airlines.

The order is valued at more than $4 billion at current list prices. Delta, in its statement, did not disclose specific terms of the agreement.

The airline, which acquired Northwest in 2008 for $2.6 billion in shares, said it would continue to take delivery of 737-900ER aircraft through 2019.

Delta declined to comment beyond its statement.

The cancellation comes as Delta and other top U.S. airlines seek to slow flight capacity growth and in some instances shrink existing service in response to falling airfares.

Airlines like Norwegian Air Shuttle ASA (NWC.OL) from outside the United States are adding flights that Delta says have exceeded passenger demand and hurt unit revenue.

Delta has 25 widebody aircraft from Airbus Group SE (AIR.PA), the A350, already slated for delivery that will add to its flight capacity this decade. Delta said earlier this year that it would defer the delivery of four A350s by a year or two from 2018 to make the schedule "more consistent with (the) expected pace of international market improvement."

Delta Air Lines Cancels Order For 18 Boeing 787s

Delta Air Lines Inc. on Tuesday officially canceled a deal for 18 Boeing widebody jets that, though long anticipated, still leaves a dent in the planemaker’s 2016 order book.

The number two U.S. carrier by traffic inherited a 2005 deal for 18 Boeing 787 jets when it bought Northwest Airlines three years later, and in 2010 deferred deliveries until after 2020 in a move that analysts viewed as a signal it would never take the planes.

Northwest had been the U.S. launch customer for the 787 and took options on 50 more jets that were due to start arriving in 2008. Design and production problems delayed the first 787 delivery—to All Nippon Airways Co.— until 2011.

Delta has focused its widebody jet fleet Airbus Group SE planes, but remains a big Boeing customer, ordering 120 of its 737-900ER single-aisle jets. American Airlines Group Inc. and United Continental Holdings Inc. both operate the 787.

Neither company detailed the terms of the cancellation, though Boeing had kept the 787s in its order book. The company has booked net deals for 70 of the Dreamliner jets so far this year and has a backlog totaling 721 of the planes.

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