Delta to buy 100 Boeing 737 MAX 10 planes

Delta Air Lines (DAL.N) will buy 100 Boeing (BA.N) 737 MAX 10 jets worth about $13.5 billion at list prices and has options to buy another 30, the U.S. carrier said on Monday.

Reuters reported in March that Delta was edging towards an order for 100 MAX 10 planes and reported last week that Airbus (AIR.PA) was in talks for Delta to expand an existing order of A220 planes.

Boeing shares were up 4% in premarket trading in New York on the announcement, while Delta was up 2%.

Delta, which made the announcement at the Farnborough Airshow, said it would start taking MAX 10 deliveries in 2025. Delta previously was the only major U.S. airline without a MAX in its fleet or on order. The MAX was grounded for 20 months after two fatal crashes killed 346 people. The grounding was lifted in November 2020 after software and training updates.

“This is a huge testament to the value of the MAX,” said Boeing senior vice president of commercial sales and marketing Ihssane Mounir at a signing event. “What an endorsement from a world-class airline.”

Boeing has had “strong demand” for the MAX since the ungrounding, with over 1,000 gross orders and 1.7 million flight hours, Boeing’s Commercial Airplanes CEO Stan Deal said.

With the new order, Delta’s Boeing 737 fleet will expand to more than 300 total aircraft and will be its second-largest fleet family behind the Airbus (AIR.PA) A320.

Reuters separately reported a top-up order from Delta for around a dozen Airbus A220s is set to be signed as soon as Tuesday at the air show.

Boeing faces a December deadline to win approval for the 737 MAX 10 – the largest member of its best-selling single-aisle airplane family. Otherwise, it must meet new cockpit alerting requirements under a 2020 law, unless Congress waives it.

Boeing CEO Dave Calhoun told Aviation Week in an interview published this month that the planemaker could be forced to cancel the 737 MAX 10 over potential regulatory issues. On Sunday, Boeing Commercial Airplanes CEO Stan Deal said that canceling the MAX 10 was “not a high probability path.”

Delta said in the event of a delay in certification “the agreement has adequate protection in place, including allowing Delta to shift to another model of the MAX family if necessary.”

Delta had extensive discussions with Boeing before it agreed to the deal. “It took us a long time getting here,” Delta senior vice president Mahendra Nair said, saying it had options if the MAX 10 does not move forward. “This is really the airplane that we would want and we would hope that Boeing can get the extension that they need for the certification.”

The MAX 10 aircraft will be 20%-30% more fuel efficient than the retiring Delta planes it will replace.