Delta to order 200 plane by end of the year, and invest in Aeromexico

[General Lee]

Delta still planning to buy 200 planes by year-end Aug 10, 2011 10:40am EDT

MEXICO CITY Aug 10 (Reuters) - Delta Air Lines Inc is still planning on buying 200 planes by the end of the year and the final decision will be made in the third or fourth quarter, Chief Executive Officer Richard Anderson said on Wednesday.

"We haven't changed our plans," Anderson said at a news conference in Mexico City announcing a deal with Mexican airline Aeromexico. [ID:nN1E7790EH] (Reporting by Cyntia Barrera Diaz and editing by Gerald E. McCormick



Delta to invest $65 million in Aeromexico
Atlanta Business Chronicle

Date: Wednesday, August 10, 2011, 10:17am EDT - Last Modified: Wednesday, August 10, 2011, 11:05am EDT
Delta Air Lines Inc. has formed a commercial alliance with Grupo Aeromexico that includes a $65 million investment in the Mexican carrier has formed a commercial alliance with Grupo Aeromexico that includes a $65 million investment in the Mexican carrier and a seat on its board.


Atlanta-based Delta (NYSE: DAL) and Aeromexico were already partners in the SkyTeam Alliance. The two now will link Delta's network with Mexico's largest passenger network.
The deal includes codesharing for all Delta and Aeromexico flights between the United States and Mexico, flights within the carriers’ domestic networks and other international destinations, Delta said.
Delta will invest $65 million in exchange for ordinary shares in Grupo Aeromexico, made up of treasury stock set aside as part of Aeromexico's primary public offering on April 14. Delta also will gain a seat on the Aeromexico board of directors. The transaction is subject to approval from certain Mexican regulators.
In a separate agreement, Delta and Aeromexico will expand a Maintenance, Repair and Overhaul agreement. This includes a new facility opening in the third quarter of 2013.
Aeromexico has a fleet of Boeing 777, 767, 737 and the latest models of Embraer 145 and 190. It operates more than 550 daily flights to different cities in Mexico, the United States, Canada, Central and South America, Europe and Asia






Bye Bye--General Lee

 

[redflyer65]

717's?

 

[belliott]

717's?

I am sure SWA would be interested in dumping AirTrans 717's to keep their common fleet tradition going... who knows...

 

[On Your Six]

717's?

Notice the article said "buying". I guess that could mean new or used.


OYS

 

[tomgoodman]

717's?

And some current 717 pilots to fly them, as with the PanAm airbii? Hmmm.

 

[Dornier 335]

Delta will invest $65 million in exchange for ordinary shares in Grupo Aeromexico, made up of treasury stock set aside as part of Aeromexico's primary public offering on April 14. Delta also will gain a seat on the Aeromexico board of directors.

Does that include sending the Aerom[FONT=Times New Roman, serif]é[/FONT]xico pilots to Alcoholics Anonymous? Seriously, from what I have experienced down there, I would think twice before boarding an early morning flight on them...

 

[Quimby]

Is Delta getting more RJ's?

 

[fam62c]

I am sure SWA would be interested in dumping AirTrans 717's to keep their common fleet tradition going... who knows...

I agree, if I bought another airline to enlarge my network the first thing I would do would be to get rid of the majority of their airplanes quickly so I couldn't take advantage of all the potential new city-pairs in the new network.....that would make perfect business sense because it would neutralize all the advantages of the merger

 

[nwaf16dude]

I agree, if I bought another airline to enlarge my network the first thing I would do would be to get rid of the majority of their airplanes quickly so I couldn't take advantage of all the potential new city-pairs in the new network.....that would make perfect business sense because it would neutralize all the advantages of the merger

Not if your real objective was to eliminate a competitor

 

[CRJ puppy]

I agree, if I bought another airline to enlarge my network the first thing I would do would be to get rid of the majority of their airplanes quickly so I couldn't take advantage of all the potential new city-pairs in the new network.....that would make perfect business sense because it would neutralize all the advantages of the merger

Caution. Post sarcasm on FI at your own risk!!

 

[fam62c]

Not if your real objective was to eliminate a competitor

You eliminate a competitor that is weak and has overlap with your business, you absorb a competitor that is strong, has little overlap and can be additive to your business. AT does a lot of flying that SW wants to continue and the combined network has a lot of connectivity opportunities for new city-pairs. They're not going to get rid of 80+ airplanes that can't be quickly replaced when they need all the deliveries they can get to replace their 300's. Start listening to what the SW CEO is saying in public to the media, industry analysts, shareholders and employees.

Anything can happen in this business we all know that but you have to look at the information that is available to determine what is probable and what makes sense. The 717's will be operated through their lease terms until they can be replaced by the newest, most fuel efficient, re-engined 737's and Boeing will give SW excellent lease terms on the planes if SW agrees to replace them with the latest 737 version when it comes out. The 717's are just part of the SW/Boeing mating ritual.

 

[BILL LUMBERG]

All kidding aside.....

Why would GK dump 717's on the market to a competitor that could be used against SWA?

Delta learned a hard lesson by selling its DC-9's to an upstart called Valujet who became Airtran who became part of SWA. Delta was responsible for it's own competition.

On a title thread note, any investment of my BK givebacks makes me nervous......the glass half full version would be to look at this like the Continental/Copa investment back in the day. AeroMexico is THE carrier in Mexico now, so cornering the bull in the ring may be a good call.

But this is FI and having a happy thought is NOT ALLOWED (Delta Stew waving her finger)

 

[GuppyWN]

All kidding aside.....

Why would GK dump 717's on the market to a competitor that could be used against SWA?

It's a trade of your -700's and some -800 delivery slots. The fragmentation language says they go with the jets so.......... have fun with that ALPA merger policy.

Gup

 

[BILL LUMBERG]

Gup,

Sounds like the SWAPA one uses a stapler.....nice!

 

[GuppyWN]

Hey they gotta fight for what they think is right. I am not going to knock them for that. But ALPA/ALPA "mergers" are much more cut and dried than our deal. That's all I'm saying.

Gup

 

[Skyboy722]

The deal includes codesharing for all Delta and Aeromexico flights between the United States and Mexico, flights within the carriers’ domestic networks and other international destinations, Delta said.

Outstanding Work General!!!!!

I expect no more Volaris comments from you.

 

[fam62c]

It's a trade of your -700's and some -800 delivery slots. The fragmentation language says they go with the jets so.......... have fun with that ALPA merger policy.

Gup

Anything is possible but why would DAL give up 737NG delivery slots to get 717's that they will eventually have to replace anyway? If SW wanted to get rid of the 717's because they think the plane is less efficient than a 737NG wouldn't DAL see the same inefficiencies and prefer the 737's?

Again, anything is possible but this doesn't make sense from a business standpoint. 737NG delivery slots are highly desired and not easy to come by, I just can't see DAL giving those up to get 717's. Also, by doing this DAL would be helping SW to become more efficient and be a tougher competitor against them in ATL.......why would they do that?

 

[On Your Six]

Outstanding Work General!!!!!

I expect no more Volaris comments from you.

Delta has codeshared with Aeromexico for years. They were both original members of Skyteam. Where have you been? SWA downplays any codeshare relationships, yet GK gives more details of the deal in that LAS article. You're not as clean as you thought. In your case it's like pregnancy, either you are or you're not.


OYS

 

[On Your Six]

Anything is possible but why would DAL give up 737NG delivery slots to get 717's that they will eventually have to replace anyway? If SW wanted to get rid of the 717's because they think the plane is less efficient than a 737NG wouldn't DAL see the same inefficiencies and prefer the 737's?

Again, anything is possible but this doesn't make sense from a business standpoint. 737NG delivery slots are highly desired and not easy to come by, I just can't see DAL giving those up to get 717's. Also, by doing this DAL would be helping SW to become more efficient and be a tougher competitor against them in ATL.......why would they do that?

Maybe Delta has a big Airbus order coming up instead? Just guessing.


OYS

 

[BILL LUMBERG]

Outstanding Work General!!!!!

I expect no more Volaris comments from you.

Easy Junior.....you couldn't find Mexico on a map, ok.....well maybe you could.....but not your route map!!!