Military

Delta to Buy 40 Boeing Jets for $4 Billion

Delta 737-900ER
The Boeing Co.
Delta Air Lines Co. (NYSE: DAL) said Thursday morning that the airline will order 40 737-900ER narrow-body jets from Boeing Co. (NYSE: BA) following ratification of a new agreement with its pilots. The order is worth about $4 billion at a list price of $99 million per plane.

The airline is replacing older narrow-body planes that are set to be retired between now and 2019. Delta ordered 100 Boeing 737-900ERs in August 2011 and has taken delivery of 40. The prospective order will raise the total for the 737-900ER to 140 jets.

Delta also will acquire 20 used Embraer S.A. (NYSE: ERJ) E190 regional jets held by Boeing. The 98-seat planes are expected to enter service in the fourth quarter of 2016 on domestic routes.

The tentative agreement between the airline and its more than 12,000 pilots includes an increase to base pay and a revision to Delta’s profit-sharing formula beginning in 2016. The Air Line Pilots Association and Delta’s Master Executive Council have approved the agreement for ratification by the pilots. If approved, the agreement could be amendable by December 2018.

Thursday’s announcement jump-starts Boeing’s appearance at the Paris Air Show, which officially begins next Monday. While the 40 planes will not be added to Boeing’s order book, it gives the aircraft maker a public relations message to match against an order announced last week from Frontier Airlines for 12 A320s from Airbus.

The first 737-900ER was delivered to India’s Lion Air in 2007 and is designed for long-range commercial routes. The planes will carry 215 to 220 passengers in a single-class configuration on routes of up to 5,990 nautical miles.

ALSO READ: How Boeing and Airbus May Fight Harder for Fewer Air Show Orders

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