PAUL LEWIS / WASHINGTON DC
US airline is seeking replacement regional aircraft as it moves to counter competition from low-cost rivals
Delta Air Lines is intensifying its studies of a future 100-seat aircraft requirement and has invited competing airframe and engine manufacturers to give a rolling series of technical presentations. The move comes as the carrier looks to counter mounting competition from lower-cost operators such as Southwest and JetBlue.
The Atlanta-based airline has had a 100-seat aircraft study under way for a several years to identify a potential replacement for its 52 107- to 119-seat 737-200s, which it plans to retire between 2005 and 2008. This effort has been stepped up in recent months with briefings by suppliers, leading industry sources to speculate that a formal request for proposals could emerge in 2003.
Delta is understood to be looking at several 100-seat options, including the Airbus A318, Boeing 717-200 and Embraer 190/195. The airline is also being briefed by industry on available powerplants, including the A318's CFM International CFM56 and Pratt & Whitney PW6000, the 717's Rolls-Royce BR715 and the 190/195's General Electric CF34-10. The emerging requirement could be for up to 50 aircraft, plus a similar number of options.
Delta Connection chief executive Fred Buttrell told Flight International in September that "intense studies" were under way on how to close the gap between the 70-seat Bombardier CRJ700 regional jet operated by Connection and the 128-seat 737-300 and 154-seat -800s in mainline service. "The big question for Delta is what to do in the 100-seat space," he said. Current scope clause restrictions would prevent a 100-seater being operated by Connection, while Delta's low-fare business unit Express is being closed and its 737-200s returned to the mainline fleet.
Delta unveiled plans last month to wind-up Delta Express and launch a new low-cost subsidiary aimed at the leisure market and which will initially operate larger Boeing 757-200s. The switch from 737s to 757s is aimed at lowering unit costs by about 25% in markets where low-fare competition is the most intense. This is being achieved by improving employee productivity and aircraft utilisation and increasing the number of seats in the aircraft. Buttrell says cost per available seat-km will be central in deciding on a new 100-seater.
With Delta having announced a $326 million loss in the third quarter of 2002 alone, aircraft financing will also play a critical part in any decision on a 100-seat aircraft, the fielding of which could be at least two to three years away.
Delta chief executive Leo Mullin has indicated that on current projections it could be 2005 before the airline can commit to any major new capital expenditure.
Source: Flight International
