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Delta places $8.5 billion order with Boeing

Delta announces order for 100 Boeing 737-900ER aircraft

Aug 25, 2011

ATLANTA - Delta Air Lines today announced plans to purchase 100 Boeing 737-900ER aircraft for delivery between 2013 and 2018 as it retires older mainline jets and upgrades its fleet.

"The 737-900ER is the perfect airplane to replace the older, less efficient airplanes in our single-aisle fleet," said Delta President Ed Bastian. "Reliability and fuel efficiency are direct contributors to our financial performance. The 737-900ER will provide us a reliable airplane with the lowest fuel burn in our domestic fleet."

The Boeing 737-900ER is the newest member of the Next-Generation 737 airplane family. It also is the highest capacity, longest-range airplane in Boeing's single-aisle fleet. New aerodynamic and structural design changes allow the airplane to carry up to 180 passengers in a typical two-class layout. The advanced-technology wing design that helps increase fuel capacity and efficiency provides substantial economic advantages over competing models.

"We thank Delta for its confidence in the Next-Generation 737-900ER as a solution to its fleet renewal," said Marlin Dailey, vice president of Sales & Marketing for Boeing Commercial Airplanes. "As an industry-leading airline, Delta's investment validates the continuous improvements we are making to the Next-Generation 737's efficiency, economics, reliability and passenger comfort."

All of the airplanes will feature the new Boeing Sky Interior. This new interior is the latest in a series of enhancements for both airlines and passengers. It introduces new lighting and curving architecture that create a distinctive entry way. Passengers will enjoy a more open cabin feel and an environment simulated by light-emitting diode (LED) lighting. The new interior also features sculpted sidewalls and newly improved and expanded pivot bins.

The order will enable Delta to add 100 fuel-efficient, state-of-the-art 180-seat aircraft to its fleet, replacing on a capacity-neutral basis older technology aircraft that will be retired from the fleet. The new aircraft will improve the company's profitability while providing customers with an industry-leading on-board experience. With a range of 3,200 nautical miles, the Boeing 737-900ER can operate on any domestic route offered by Delta.

"A key component of Delta's strategy is making prudent investments for the future while maintaining our financial and capacity discipline," said Richard Anderson, Delta's chief executive officer. "With this next-generation Boeing aircraft, we can give our customers a superior in-flight experience while at the same time improving our shareholder returns.

"I want to commend all the manufacturers who participated in this process. Their innovation in developing fleet solutions for the future resulted in several very competitive proposals," he said.

Financially Sound Investment

Delta will begin taking deliveries of the aircraft in the second half of 2013, with 12 aircraft in 2013, 19 aircraft per year in 2014 through 2017, and the remaining 12 aircraft in 2018. Each aircraft has committed long-term financing.

The size and timing of the order will allow Delta to maintain its annual capital expenditure run rate between $1.2 billion and $1.4 billion over the next three years and will not impact the company's $1.2 billion of capital expenditures projected for 2011. Capital discipline is key to the company achieving its $10 billion adjusted net debt target by 2013.

As a result of maintenance efficiencies and a 15 to 20 percent improvement in fuel consumption per seat, the Boeing 737-900ER will have lower unit costs than the older technology Boeing 757 and 767 and Airbus A320 aircraft that it will replace. The aircraft will be equipped with CFM56-7B engines produced by CFM International, a joint venture of General Electric Co. of the U.S. and Snecma of France.

"With significant savings from increased fuel efficiency and lower maintenance costs, these aircraft will be cash flow positive and earnings accretive from the first year of operation," Anderson said.

Enhanced Customer Experience

Delta is more than halfway through a $2 billion, three-year investment to enhance the customer experience as a means of generating a unit revenue premium to the industry. The investments include improvements to Delta's fleet, facilities and technology.

The 737-900ER will be Delta's first aircraft to feature Boeing's new "Sky Interior," which offers expanded carry-on baggage space, a roomier, more airy cabin and an LED lighting system that provides different color schemes, such as a soft blue sky and a relaxing pallet of sunset colors.

Delta recently completed the installation of full flat-bed seats in the BusinessElite cabin of all Boeing 777 and 767-400ER aircraft, and began installing full flat-bed seats in its 767-300ER aircraft this month. To date, more than 25 percent of Delta's widebody international fleet has received the upgrade and the airline's entire widebody international fleet of more than 140 aircraft will be flying with full flat-bed seats in BusinessElite by the end of 2013.

This summer, Delta began offering its new Economy Comfort class on more than 160 Boeing 747, 757, 767, 777 and Airbus A330 aircraft. Located in the first few rows of the economy cabin, Economy Comfort features up to four additional inches of legroom, 50 percent more recline than Delta's standard international economy class seats, and early boarding.

At the same time, the company has been investing in enhancing its domestic fleet, with in-flight WiFi on all two-class domestic aircraft, interior upgrades and the installation of additional First Class seating. Delta also will offer Wi-Fi on its entire dual-class regional fleet of 228 aircraft by the end of 2011.

Delta's ongoing investment to enhance the customer experience also includes work underway on its new Terminal 4 at New York-JFK, opening in 2013, and the new Maynard H. Jackson Jr. International Terminal in Atlanta, opening in 2012. Pending final approval of an agreement between Delta and US Airways to transfer takeoff and landing rights at New York's LaGuardia and Washington D.C.'s Reagan National airports, Delta also will spend $100 million to expand, renovate and consolidate terminals C and D at LaGuardia over the next two years.

Delta announces order for 100 Boeing 737-900ER aircraft

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