Delta to acquire 20 Embraer E190s and 40 new 737-900ERs upon pilot ratification of tentative agreement

By in
No comments

News & Finance
by Jim Gilliam
June 11, 20150 comments

Delta Air Lines (NYSE: DAL) will enter into an aircraft acquisition deal with The Boeing Co. for 20 Embraer E190 aircraft and 40 additional new 737-900ERs upon ratification of a tentative agreement covering more than 12,000 Delta pilots. The tentative agreement was approved for membership ratification today by the Delta Master Executive Council (MEC) of the Air Line Pilots Association (ALPA).

The tentative agreement provides enhancements to overall pilot compensation—including base pay increases—along with a revision of the airlines profit sharing formula beginning in 2016. Additionally, this accord would secure additional career advancement opportunities for Delta pilots while providing the airline with productivity enhancements and further fleet flexibility across the airlines U.S. domestic system.

Our airlines culture of working and winning together has long set Delta apart from others in our industry, said Richard Anderson, Deltas Chief Executive Officer. This tentative agreement with ALPA reflects the key role and contributions of our pilots in our excellent financial and operational performance.

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.

We fully support the Delta MECs endorsement of this agreement and are optimistic of its approval by our pilots, Anderson said. This continues the investments weve 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 E190s will enter mainline Delta service in the fourth quarter of 2016.

These 98-seat mainline aircraft will be flown by Delta pilots, Anderson said. The capability and aptitude of all Delta people has already shown that they are the best in the business at managing a diverse fleet while keeping costs in check and never compromising safety. These cost-efficient aircraft will play a key role as we strive to achieve higher returns for our shareholders, and we thank Boeing for their important partnership.

The E190 will be deployed on U.S. domestic routes to improve the flying experience for Delta customers and continue the shift of flying away from inefficient 50-seat regional jets as part of the companys successful upgauging strategy.

Delta will also order an additional 40 new Boeing 737-900ERs, augmenting an existing order of the efficient and reliable aircraft to 140 in total. Delta plans to deploy these aircraft as replacements for other narrowbody aircraft scheduled to retire through 2019.

Negotiating committees for Delta and ALPA reached a tentative agreement on June 4. In the ensuing days, the tentative agreement was reviewed and subsequently approved by the Delta MEC on June 10.

Delta Air Lines serves more than 170 million customers each year. Delta was named to FORTUNE magazines top 50 Worlds Most Admired Companies in addition to being named the most admired airline for the fourth time in five years. Additionally, Delta has ranked No.1 in the Business Travel News Annual Airline survey for four consecutive years, a first for any airline. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 335 destinations in 64 countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. The airline is a founding member of the SkyTeam global alliance and participates in the industrys leading trans-Atlantic joint venturewith Air France-KLM and Alitalia as well as a newly formed joint venture with Virgin Atlantic. Including its worldwide alliance partners, Delta offers customers more than 15,000 daily flights, with key hubs and markets including Amsterdam, Atlanta, Boston, Detroit, Los Angeles, Minneapolis/St. Paul, New York-JFK, New York-LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Seattle and Tokyo-Narita. Delta has invested billions of dollars in airport facilities, global products, services and technology to enhance the customer experience in the air and on the ground.