Delta ready to ink deal for 40 Boeing 737 jets & 20 Embraer aircraft in $4 billion deal

Delta Air Lines Boeing 737-932(ER) (31915/4704) N809DN "The Spirit of Seattle" arrives at Los Angeles International Airport (LAX/KLAX) on December 12, 2013.

(Photo by Michael Carter)

Delta Air Lines Inc. will enter into a deal with The Boeing Co. to buy 40 new 737-900ERs and 20 Embraer E190 aircraft upon ratification of a tentative agreement covering more than 12,000 Delta pilots.

 

The planes are valued at about $4 billion at list prices, according to Bloomberg.

 

The tentative union agreement, which was approved Wednesday by the Delta Master Executive Council of the Air Line Pilots Association (ALPA), “provides enhancements to overall pilot compensation -- including base pay increases -- along with a revision of the airline's profit sharing formula beginning in 2016,” Atlanta-based Delta said in a prepared statement.

 

The accord also would secure additional career advancement opportunities for Delta pilots while providing the airline with productivity enhancements and further fleet flexibility across the airline's U.S. domestic system, the carrier said.

 

"Our airline's culture of working and winning together has long set Delta apart from others in our industry," Delta CEO Richard Anderson said in a statement. "This tentative agreement with ALPA reflects the key role and contributions of our pilots in our excellent financial and operational performance."

 

Anderson added, "We fully support the Delta MEC's endorsement of this agreement and are optimistic of its approval by our pilots. This continues the investments we've made in our people and in our products and services for our customers. These moves will continue to drive the industry-leading performance that has allowed us to return more than $3 billion to shareholders and still reward our employees with industry-leading profit sharing."

 

Upon ratification of the agreement, Delta will acquire 20 Boeing-held Embraer E190 aircraft previously operated by another carrier, the company said. The E190s will enter mainline Delta service in the fourth quarter of 2016, Delta added.

 

 

The E190 will be deployed on U.S. domestic routes and will continue the shift of flying away from inefficient 50-seat regional jets as part of the company's successful upgauging strategy, Delta said.

The airline said the order for 40 new Boeing 737-900ERs augments an existing order of the aircraft to a total of 140. Delta plans to deploy the aircraft as replacements for other narrow-body aircraft scheduled to retire through 2019, the company said.

 

The MEC will put the tentative agreement out to pilots for a ratification vote. If approved, the agreement would have an amendable date of Dec. 31, 2018, Delta said.

 

Delta MEC Chairman Captain Mike Donatelli said in a letter posted on the union’s website the organization will, beginning Tuesday, conduct educational road shows to answer pilots’ questions regarding the tentative agreement.

 

(Carla Caldwell - Atlanta Business Chronicle)