Why Delta (and others) are buying from Airbus and not 777s

I also heard it was a simple case of being able to get the aircraft earlier.

DL this time has taken an AI package…because this time that was the better pitch. Next time…

It’s all in the deal on offer here, now. Neither AI nor Boeing has the better product, absolutely. The reason carriers have both 787 and A350, 777 and A330, 747-8 and A380 is that on route A the best fit is Mr.Boeing’s pitch and on route B, M.AI’s. Upfront $, plus flight hour $, plus terms – Guarantees (fine words…enforceable?), Residual Value support, payment schedule…

Neither Boeing nor AI is abandoned by its National/Province Tax Authorities: Mobile (AI) and Charleston (Boeing) made luscious offers to secure jobs. Lawyers have enjoyed a decade, and counting, on a World Trade Organisation Case on subsidy of Large Transport Aircraft: foolishly, neither claimant has the wit to let it go (Bombardier and Embraer did let theirs go). Early findings were that both claimants were in receipt of subsidy.

So Boeing doesn’t get State help???

8.7 BILLION dollars tax break

Try re-reading my post….
“And yes, Boeing gets local and state tax breaks (again to keep jobs in the area)…”
You may not understand how the U.S. is organized….I’m using the word “state” as in one of the 50 semi-autonomous states in the U.S. that taxes local firms (and people)…not state in the national/federal sense.
But nothing from national authorities and to the best of my knowledge, no government owns shares.

So Boeing doesn’t get State help???

8.7 BILLION dollars tax break

http://www.businessweek.com/articles/2014-10-01/boeings-puget-sound-job-cuts-has-unions-questioning-billions-in-state-tax-breaks

One question posed by the article…it says Airbusses are newer (granted) and cheaper.
How than they be cheaper?

The article is a tad confusing.

Airbus are offering 2 products in the market in the timeframe, A330NEO and A350.

Boeing have two potential offers, the 787-9 and the 777-300ER.

If Delta want the new engines, then they have to choose between A330NEO, A350 and 787-9, ruling out the new technology.

If they want the cheapest, they’d go with 777-300ER or A330NEO (as most R&D costs are sunk).

But, they’ve decided to go with an Airbus mix, getting 90+% of the efficiency saving at maybe 80% of the 787/350 cost with A330NEO, and the full price A350 for further fuel savings at greater cost.

The overall cost of the Airbus deal is less than a full 787-9 deal, and the fuel savings are almost as good. The cost may be more than a 777 deal, but the fuel savings substantially more.

Why did the TriStar run out of fuel…was that not a crew error??

Having worked for Delta…the bottom line is the only thing they care about.
If they can save a few buck buying Airbus…or a cheap Chinese knock-off (no doubt coming in the future) they’ll do it.

One question posed by the article…it says Airbusses are newer (granted) and cheaper.
How than they be cheaper? The 777 has long since amortized its R&D costs. How can Airbus undercut that price when it has to pay for new design’s R&D?
That begs the question…are they paying off R&D?
On a related note, wasn’t much of the development cost for the A400 forgiven by various govts?

Is it the old story of development costs paid for by low/no interest loans provided by state banks?
Boeing is run as a commercial enterprise with no government share holding. Last time I read something on the subject, many airbus shares are owned by governments or government controlled banks…to give them leverage with the firm to keep jobs in their respective areas. I recall reading something about many shares formerly owned by the French govt. being bought by German states.

And yes, Boeing gets local and state tax breaks (again to keep jobs in the area) but I’m certainly not aware of any direct government ownership or low cost loans.
Is it a level playing field?

That Bloomberg article’s comment page contains this interesting story (near the end)
” As per the article, you have to consider the source of rejecting the 777 is Delta. The last Delta jumbo I was on was a Lockheed Tristar and we ran out of fuel north of Atlanta in a severe thunderstorm, glided in for a dead stick landing, and had to coast up to an American Airlines ramp. American Grounds crewmen put out our tire fires, then provided electricity, food, drink, and American stewardesses to take care of us and our crew. Delta sent a Vice President who fired our Captain as he wouldn’t vacate the plane so we could be kicked off and Delta could retrieve their plane to be repaired for service. He was rehired momentarily by Delta as a senior American Captain was there congratulating ours’ on a great landing and offered him a job at American. There were at least 60 front seat pairs who visited to congratulate and thank him throughout the night for the great landing saving their necks too. Delta can run their airline however they want, but I’m flying cross country next month and got my tickets on American for 2/3 the price of a Delta ticket. “….wonder when that was?