DALLAS – This interview was conducted with Mahendra Nair, Senior Vice President of Fleet and TechOps Supply Chain at Delta Air Lines (DL), following the debut of the airline’s A321neo into its fleet.
AW: At what rate will Delta be accepting deliveries of the A321neo, and how many do you have planned for the rest of the year?
MN: The original plan for the A321neo was to start in 2020, but COVID-19 delayed those plans. Our delivery schedule is split between 2022 and 2027.
We’re going to take 26 this year. We’ve already taken delivery of two, so we’ve got 24 to go this year, and we have another double-digits coming next year. The delivery schedule with Airbus is moving around a little bit with everything that’s going on, but between 2022 and 2027, we’ll be taking all of the 155 that we have on order.
Since you will be taking delivery of so many this year, will we see any on the West Coast or will they primarily be on the East Coast?
It’s going to start in Boston, and we’re going to build out from Boston, going into Denver, San Diego, San Francisco, and Seattle. Eventually, once we have some scale on the airplane, that’s when you’ll start seeing it go from the West Coast and even at other bases.
We are building on the 127 A321ceos that we already have, so we’ve got all these hubs that have commonality with pilots, and tooling, so it’s a matter of getting to scale on the A321neos before we see it at other bases.
Will we see any of the A321neos take over any of the Boeing 757 routes?
That is the plan, but eventually, what we are working on right now is when we are going to specifically get those airplanes, and then there will eventually be a one-to-one replacement for the 757s, especially the ones that fly transcontinental.
Is there a retirement date set for the Boeing 757 yet?
They are relatively young for us, so I think some of the older ones will start being retired in the next two to three years, but we expect the 757s to fly in our fleet all the way through the 2030s.
The A321neo is a gamechanger, especially the First Class; are there any cities you’re targeting specifically with the new First Class?
There’s a lot of focus on growing Boston, and we will eventually get them into New York and Atlanta as we get to scale. At some point, over the next couple of years, we will probably have 50 or 60 airplanes, and we will start seeing them at all of our major hubs. With 194, it’s a great hub.
The A321neo has more Comfort+ seats than the A321ceos. Is there a specific reason for that?
We have consciously made a decision to move up in the premium cabin configurations for a couple of reasons. Even before COVID-19, we were seeing an increase in demand for our premium products and the way we have segmented this is we have started to provide more features to our Comfort+ and DPS product customers.
You will see that as a premium offering that Delta is offering, and you will see an increase, across the board, in the premium selection and seat availability across all of our fleets. It’s just the beginning with the A321neos.
We expect the Boeing 757s to fly in our fleet all the way through the 2030s.Mahendra Nair, Senior Vice President of Fleet and TechOps Supply Chain at Delta Air Lines
Is the First Class product specifically for the A321neo, or will we see any retrofits to any domestic aircraft?
Right now, it’s targeted for the A321neo. We are very optimistic that the features that we have built in the First Class have been in response to a lot of feedback. We’ve been listening to our customers and flight attendants, our ground staff, and our maintenance crew, so a lot of the features we built in were in response to that. We’re going to fly this for a while and see how it does in actual experience and customer feedback.
Everything we’ve done with customers in the last couple of days has been pretty good. Over time, we always have a plan to retrofit our cabins; we’re always upgrading our products, so yes, if this becomes a success, with any of the feedback that we get, we will continue building that out into our premium offerings. There’s no date that’s been set yet.
To be clear, we haven’t said that we will do this for X aircraft within X amount of time. We will do that once we get enough feedback from customers.
Moving more broadly into the fleet of Delta, how has COVID-19 affected the airline’s fleet?
In 2020, we started off with almost 1350 aircraft in our fleet. We retired almost 220 airplanes, and then what we essentially did was go from 13 families to seven families. We took out the MD-88s, MD-90s, and the 777-200ERs, and 777-200LRs. By eliminating those four fleet types, we managed to reduce two pilot categories.
We basically have simplified; we look at our fleet strategy by what is known as the ‘Four S’ strategy, which is: simplifying our fleet, growing our fleet to scale, having the size, as in the gauge of the airplanes, and all of our fleets being sustainable going forward.
We are looking at, from a scale standpoint, just between the three narrowbody categories, we will have more than 600 aircraft (737s, A320 family, and A220 family). That’s where we’re building out on scale.
On size, on large gauge departures, we were only at 36% in 2019, and we’re going to have about 50% of our departures as large gauge by 2023. That’s where size comes into play, and that also helps in better seat costs. And then finally, sustainability; we are replacing some of these older aircraft with next-generation aircraft, which are anywhere between 20-25% better than the fleets they replace.
The A321neo, for example, is 20% better than the A321ceo, but it will be more than that when it replaces the 757.
COVID actually allowed us to take a good look at our fleet simplification strategy and allowed us to progress our fleet vision by accelerating the retirements of some aircraft that were not at scale.
Right now, we’re seeing a lot of supply chain issues across the globe. What are some of the challenges that have come with that for Delta’s fleet?
From a fleet standpoint, there are a couple of different challenges. One of them that is common to every airline and to all of us in our personal lives is fuel. In December, we presented at Capital Markets Day, what our fuel plans for the next three years were going to be. That’s been upended significantly; we’re almost US$1.50 above what we had shown at Capital Markets Day.
The second challenge is that, across the board, Tier 2 and Tier 3 supply chains are impacted coming out of COVID-19 by the shortage of labor and trained labor because the people that left and the people that are coming in are very different, and we have to be able to train that labor.
Obviously, the Russia-Ukraine crisis has put a spotlight on titanium, nickel, and other inert gases, things that are found in Russia that could, over time, make their way into the supply chain.
We have been connected with our Tier 1, Tier 2, and to some extent, some Tier 3 providers, and doing a complete inventory of what they have, what their production looks like, and everybody seems to feel good at least for the next 10 to 12 months, that they have some line of sight. It will get tighter if the situation in Russia and Ukraine doesn’t improve.
If the supply chain worsens in the time frame that you mentioned, do you foresee any accelerated retirements of aircraft?
Actually, it’ll be to the contrary. If the supply chain worsens and we don’t have the ability to get parts, particularly for newer aircraft, we will actually be flying some of the older aircraft for a little longer.
Your question is very valid in the sense that it’s going to be about balancing a higher fuel price for an older fleet versus trying to get newer aircraft which Boeing and Airbus may not be able to supply because they have supply chain issues. It’s going to be a balance that we will continue to be watching, and we have retirement plans for aircraft but we will be making decisions based on the availability of fleets.
Featured Image: Delta Air Lines