Delta nearly joined its rivals in buying the troubled Boeing 737 Max

source
Wikipedia

  • Delta Air Lines almost bought the troubled Boeing 737 Max aircraft, which was grounded worldwide earlier this year after its software was implicated in two crashes in five months that killed nearly 350 people.
  • “It was a close call,” CEO Ed Bastian said on the earnings call this week. “We spent quite a few months analyzing and going back and forth.”
  • Rivals American, United, and Southwest Airlines have 72 Max aircraft between them, meaning they’ve been forced to cancel thousands of flights and lose out on hundreds of millions of dollars.
  • Watch Delta trade live.

Delta Air Lines almost bought the troubled Boeing 737 Max aircraft, which was grounded worldwide earlier this year after its software was implicated in two crashes in five months that killed nearly 350 people.

The Max is a “good product” and “very competitive,” Delta CEO Ed Bastian said on the airline’s earnings call this week. The company conducted a “comprehensive review” that looked at the cost, the engine, customers’ views of the aircraft, and other factors before ultimately opting for the Airbus A321neo.

“It was a close call,” Bastian said. “We spent quite a few months analyzing and going back and forth.”

Delta’s main rivals – American, United, and Southwest – have been hit hard by the 737 Max’s grounding. They have 72 of the model across their combined fleets, meaning they’ve been forced to cancel thousands of flights and lose out on hundreds of millions of dollars. Delta has picked up the slack, earning record adjusted revenues and pre-tax profits last quarter.

Bastian refused to speculate about how competitors could return the aircraft to service without hammering revenue per available seat mile, a key industry metric. However, he said it would be challenging.

“It’s clear that Max has been a real – it’s had a dramatic impact on our industry,” he said on the call. “I think the reintroduction, when the time comes, is going to have to be carefully managed, no question.”

Delta doesn’t plan to add any Max aircraft to its fleet, even if they’re sold at a bargain price. “We feel comfortable with our existing order book,” finance chief Paul Jacobson said on the call.