Credit: Shutterstock photoDelta Air Lines ( DAL ) snubbed Boeing [ticker symb=BA ] and picked its European rival Airbus ( EADSY ) for a massive midsize jet order in a deal announced Thursday.
[ibd-display-video id=3023531 width=50 float=left autostart=true] The airline, which had been in talks with Boeing about buying around 100 of its 737 Max 10 jets, will instead buy 100 A321neos, worth $12.7 billion at list prices though airlines typically get steep discounts for major deals.
Deliveries of the Airbus planes will begin in 2020, Delta said in a statement. The deal also includes a purchase of United Technologies ' ( UTX ) Pratt & Whitney geared turbofan engines.
The Airbus order comes after a spat over narrow-body C Series passenger jets from Canada's Bombardier. Under pressure from Boeing, which claimed the C Series received unfair state aid, the U.S. levied a sky-high tariff on the plane, which Delta is buying. The carrier has since vowed not to pay the tariff.
Boeing shares were up 0.7% to 293.88 on the stock market today . Airbus tumbled 4.1% as CEO Tom Enders could be ousted over corruption probes. Delta rose 3%, reclaiming a recent buy point as the carrier also raised unit revenue guidance . United Tech dipped 0.4%, still in buy range.
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Losing the Delta deal could push Boeing to making a decision on whether to build a midmarket plane, which analysts have dubbed the 797, to compete against A321neo.
The A321neo has taken significant market share from Boeing, as it has allowed airlines to open new routes that aren't accessible with smaller planes and aren't profitable with larger ones.
Earlier this year, Boeing CEO Dennis Muilenburg confirmed that the new plane could seat roughly 250 passengers and have a range of 5,000 nautical miles.
Boeing has talked to United Airlines ( UAL ), Air Lease ( AL ) and other potential customers. At the Dubai Airshow last month, Boeing said it talked to state-run Saudi Arabian Airlines about a midmarket plane.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
