Delta adds 10 A330neo in boost to Airbus’ slow-selling jet

PARIS/CHICAGO (Reuters) – U.S. carrier Delta Air Lines (DAL.N) said on Friday it ordered 10 Airbus (AIR.PA) A330neo long-haul jets, reinforcing its position as the first U.S. airline to operate the upgraded jet and lending its influential support to a slow-selling model.

Passengers check in at a counter of Delta Air Lines in Mexico City, Mexico, August 8, 2016. REUTERS/Ginnette Riquelme/File Photo

The additional A330neo purchase is worth some $3 billion at list prices but is likely to represent below half that after typical discounts as the jet faces competition from newer models, market sources said.

As part of the order, Delta also confirmed it was deferring delivery of 10 pricier A350 jets to 2025-26. The agreement contains the right to convert the A350 orders to A330-900s.

Delta previously had 25 of each type of plane on order but said last year it was reviewing its wide-body requirements.

“Expanding our A330 order book not only ensures that Delta’s near-to-medium-term widebody needs are taken care of, but also drives our strategic, measured international growth,” Delta Chief Operating Officer Gil West said.

The A330neo is powered by Rolls-Royce’s (RR.L) new Trent 7000 engine, which offers fuel savings. But it has suffered delays as the British company focuses on fixing extensive problems on a similar model of engine that powers the Boeing (BA.N) 787.

With the new deal, Atlanta-based Delta’s A330neo order will grow to 35 from 25 jets. The airline also operates around 40 earlier A330 models that use a previous generation of engine.

For Airbus, it is the second order for the A330neo in as many weeks after Kuwait Airways ordered eight of the long-haul planes in mid-October.

Airbus is aggressively seeking more orders for the latest version of its profitable A330 franchise. Sales of the engine-upgraded A330neo model fell short of expectations in the face of heavy competition from Boeing Co’s (BA.N) newer 787.

Industry sources say Airbus is prepared to use the power of its successful A350-900 order book to boost the A330neo by selectively allowing airlines to adjust existing orders for the newer and costlier A350 in favor of the A330neo.

Kuwait Airways has also struck a deal with Airbus allowing it to defer some A350 planes as it orders the A330neo, a person familiar with the matter said.

Delta currently operates 11 A350-900 aircraft and expects to take delivery of two planes in both 2019 and 2020. It will retire older Boeing 767s in coming years as they reach the end of their serviceable life cycle.

Reporting by Tim Hepher in Paris and Tracy Rucinski in Chicago; editing by Matthias Blamont and David Gregorio

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