Please ensure Javascript is enabled for purposes of website accessibility

Delta Will "Permanently Retire" the Boeing 777

By Rich Smith - May 14, 2020 at 1:39PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Going forward, Airbus airplanes will service Delta's long-haul flights.

With COVID-19 having destroying demand for air travel, Delta Air Lines (DAL 1.59%) has grounded "more than 650" of its aircraft -- or about 73% of its fleet. More than that, the company says it has begun retiring its entire fleet of 45 smaller MD-88 and MD-90 aircraft. Now comes the next shoe to drop: Delta is retiring its fleet of Boeing 777s.  

Boeing 777 flying west

Image source: Getty Images.

In a filing with the SEC this morning, Delta included a letter from CEO Ed Bastian to its "Delta Colleagues Worldwide." Therein, Bastian explained that Delta is charting a course toward "a smaller network, fleet and operation," and that part of this plan includes retiring its entire fleet of 18 Boeing (BA 1.26%) 777 airplanes by the end of the year.

Bastian cited "the unprecedented drop in travel demand amid the COVID-19 pandemic and global economic slowdown" and the pressing need "to protect Delta's cash, Delta jobs and Delta's future [and] reduce our cash burn to zero by the end of the year" as the reason underlying the decision to retire the 777.  

The CEO further noted that this move is intended to help reduce its cash burn from $50 million a month currently, to zero by the end of the year, and also "provide significant cost savings over the next several years."

Going forward, Delta plans to rely on A330 and A350-900 aircraft from Airbus (EADSY 0.90%), of which it has 60 total, to support its long-haul and international flights. These airplanes, the company says, are "more fuel-efficient and cost-effective" than Boeing's 777.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
DAL
$34.50 (1.59%) $0.54
The Boeing Company Stock Quote
The Boeing Company
BA
$169.99 (1.26%) $2.11
Airbus Stock Quote
Airbus
EADSY
$27.94 (0.90%) $0.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.