Is Delta Air Lines competitive with the B737-900ER?

Yesterday came the press release confirming Delta's order for 100 B737-900ER.

These will delivered between 2013 and 2018 and there is no mentioning of a possibility to switch to the reengined variant.
In the press release Delta stresses a fuel burn advantage of 15-20% against the B757, B767 and the A320. If fuel is responsible for about 40% of your cash operating costs, this is big and results in 6-8% lower COC's. But to be competitive, Delta has to look what the competitors will do, especially the low cost carriers, which have lower COC's to begin with.
Virgin America and jetblue have ordered the A320neo
. Virgin America will take their first delivery in 2016, jetblue will get their first "neo" later, in 2017, after their last "classic" A320 arrived. As jetblue changed some of their A320 orders over to the A321, it is not unlikely that they will also take some A321neo's as part of their A320 neo order.
So let us compare the fuel burn per trip and per passenger of the B737-900ER, the A320neo and the A321neo and look at typical mission ranges. According to jetblue's monthly traffic statistics, the average trip length of all flights is around 1100nm. The average trip length in Virgin America's network is around 1400nm. And I also looked at flight at a 500nm trip length.
Delta will fly the B737-900ER with 180 seats, the typical 2-class layout of this aircraft.
jetblue has 150 seats in their A320's, the A321 can seat 185 with the same comfort level (read: seat pitch).
Virgin America has a 3-class layout (8/12/129) with 149 seats overvall.
The A320neo will seat 153, as the layout in the aft cabin changes, but I for the "per seat" charts I used 150 passengers for now.
Fuel burn/trip for the B737-900ER, A320neo and the A321neo

The fuel burn/trip difference between the B737-900ER and the A321neo is not that big for a short mission, as the higher weight of the Airbus is somewhat negating the more efficient neo engines. But as the trip length gets longer, the B737-900ER gets heavier compared to the A321neo, as it has to carry more and more fuel.
Fuel burn/seat of the A320neo and A321neo relative to the B737-900ER
The fuel burn/seat difference between the A320neo and the B737-900ER is more or less negligible for short routes, but on typical routes that Virgin America flies it extends to more than 6%.The A321neo, offering a comparable capacity as the B737-900ER, is almost 9% more fuel efficient even on short routes and that extends to more than 10% on typical jetblue routes.

What does that mean for COC? Given that fuel costs are 40% of COC, Virgin America has an edge of 2.4% from the fuel burn/passenger, jetblue (with an A321neo) would have 4% lower COC just through the fuel burn difference.

And, even worse for Delta, their operating costs ex fuel, are much higher than costs at jetblue (Virgin America is not publicly traded, so they do not have to publish their cost spreadsheets, but their costs ex fuel should be comparable to those of jetblue).
CASM ex fuel for Delta Air Lines and jetblue according to 10-Q Reports
So, very clearly, the Delta's move from the B757 to the B737-900ER is a big step forward in terms of fuel consumption as a recent post from AirInsight explains - but the competition seems to be just another step ahead once Delta has all these aircraft in the fleet.


  1. Hello,

    The choice of the 737-900ER comes as a surprise, when seeing the market trend.

    I have two questions:
    What is the performance of the 737-900ER in comparison to the A321-classic.

    Delta PR mentions : “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.”

    What is the performance of the 737-900ER in comparison to the A320-classic.

    Best Regards,

  2. MK2,

    as the A320neo should consume about 15% less than the A320classic, you can just add 15% to the fuelburn of the neo to get the fuelburn of the classic - although for short routes it will be a little bit less than 15% more because of the lower empty weight od the classic.


  3. Correct me if I'm wrong but is this really a valid analysis to compare apples to oranges - an NG to a NEO? Further, Delta wanted to upgrade sooner rather than later and NEOs will not be available in the relevant time frame. Why stray outside of the realm of reality to make a point? Bias? I look forward to your analysis of the 737RE vs. the NEO.

  4. Love the blog. You have very persuasively shown that DL's new planes won't be as economical as NEOs (or REs, for that matter). However, the story is never that simple. I have lost track of where Airbus stands with delivery slots for the NEO but with 1000 on order and at least some EIS risk, it's possible (likely?) that DL wouldn't receive their first NEO (or to a lesser degree RE) until 2020 or later. So, the full analysis would compare ~5 years of NG Vs 757 performance plus ~20 years of comparison to the NEO. Add in elevated maintenance for the old planes and the time value of money and the NG decision starts to look. Pretty good, no?

    Again, thanks for the blog.

  5. Anonymous -

    all I wanted to show is how Delta's fuel cost with their B737-900ER compare to the us low cost carriers which receive neo's in the same timeframe. So I cannot see how this should be biased or outside od reality...
    As soon as technical data for the RE is available (and I guess we can expect these in the next few weeks as the Boeig board should give it's OK for the RE today), I will try to make an assessment of RE vs. NEO, for sure. Also, it would be interesting to make a comparison of AA's future 737-900RE (I guess they are included in their order) vs. DL's B737-900ER.


  6. Hello aeroturbopower,

    Considering 'Fuel burn/seat of the A320neo and A321neo relative to the B737-900ER' chart above and estimating that with a 1400 nm trip
    Let 'Fuel burn/seat of the B737-900ER' = 1.
    Let 'Fuel burn/seat of the A320neo' = 'Fuel burn/seat of the B737-900ER' x 0.9325
    Let 'Fuel burn/seat of the A321neo' = 'Fuel burn/seat of the B737-900ER' x 0.8850

    Considering that 'the A320neo should consume about 15% less than the A320classic'
    Let 'Fuel burn/seat of the A320neo' = 'Fuel burn/seat of the A320' x 0.85
    Let 'Fuel burn/seat of the A321neo' = 'Fuel burn/seat of the A321' x 0.85


    'Fuel burn/seat of the A320' = 'Fuel burn/seat of the A320neo' / 0.85
    'Fuel burn/seat of the A321' = 'Fuel burn/seat of the A321neo' / 0.85


    'Fuel burn/seat of the A320' = 0.9325 / 0.85 = 1.0971
    'Fuel burn/seat of the A321' = 0.8850 / 0.85 = 1.0412

    Fuel burn/seat of the A320 is 9.7% higher than B737-900ER
    Fuel burn/seat of the A321 is 4.1% higher than B737-900ER

    If Delta wanted to acquire a plane that is on the market today, and if 'Fuel burn/seat' is the main KPI to satisfy, based on the assumptions above, they chose the most fuel efficient single-aisle aircraft...

    Best regards,

  7. MK2,

    doing that simplistic calculation you are absolutely right. The problem Delta will face is that there are airlines that will take the reengined aircaft (both the A320neo and the B737MAX) at the same time Delta is getting their last bactch of B737-900ER and they have to compete with them for the 10-20 years afterwards.


  8. Cant we make the argument that the 737-900ER's that Delta is taking in say, 2014, are competing over the course of their lives with A321's that JetBlue is taking in 2014, and not 321NEO's they take in 2018 (or whenever). Delta is clearly going to be ordering a different type of aircraft for delivery beyond 2018 itself. A true apples to apples comparison would be a 2014 vs. a 2014 delivery, not a 2014 delivery vs. some airplane the competitor gets down the road.

    Besides, the Opportunity Cost of NOT replacing 757's and such until 2018 or later is far worse than the economic disadvantage implied in the analysis. no?

  9. Kiran,
    if you argue like you do, one has to consider the whole fleet mix of two competing airlines for each year, as every year new aircraft will be phased in the fleet and old ones will disappear. But aircraft have a useful life of 20 years and more, so differentiating between a 2014 delivery and a 2016 delivery (in the case of VA) does not make sense IMO.
    But of course you are right: NOT replacing the 757 at all is not an alternative...

  10. >The choice of the 737-900ER comes as a surprise,
    >when seeing the market trend.

    From http://leehamnews.wordpress.com/2011/08/27/delta-737-900-order-bypasses-re-engine/
    they wanted everything delivered by 2018 and
    * The 737Max was too late.
    * The A320 A320Neo didn't have enough empty slots

  11. What is the average sector length for Delta airlines narrowbody aircraft (757)?

  12. Paulo M,
    I don't know. Delta does not provide figures like that for their sub-fleets - at least I haven't seen them...