Delta working with Airbus on order book after deferring A350 orders linked to Latam

FILE PHOTO: Delta Air Lines passenger planes are seen parked due to flight reductions made to slow the spread of coronavirus disease (COVID-19), at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, U.S. March 25, 2020. REUTERS/Elijah Nouvelage

SAO PAULO/PARIS (Reuters) – Delta Air Lines Inc (DAL.N) confirmed on Tuesday it had taken over an order for 10 Airbus (AIR.PA) A350 jets from Latam Airlines Group LTM.S, but said it had deferred several of the near-term deliveries and was working with Airbus on options across its entire order book.

A Delta spokeswoman said the 10 A350 aircraft, which stem from Delta’s tie-up agreement with Chilean carrier Latam, would be delivered through 2025.

The deal, which Reuters reported earlier on Tuesday, firms up a planned switch first announced when the two carriers forged their alliance in 2019 and whose completion was partially disclosed in manufacturing data issued last week.

The formal transfer of the jet order, worth roughly $3 billion at list prices, coincides with Delta and other U.S. airlines negotiating government aid to help them meet their payroll costs while dealing with a drastic drop in air travel demand because of the coronavirus pandemic.

“Given the current environment, we are working in close partnership with Airbus on further rescheduling opportunities across our entire order book,” Delta spokeswoman Lisa Hanna said.

Delta Chief Executive Ed Bastian told employees on Tuesday that the airline would receive $5.4 billion in U.S. government payroll support that would protect jobs through Sept. 30, but continued to encourage workers to consider taking unpaid leaves of absence as it weathers a 95% decline in passenger traffic.

Bloomberg News reported on Tuesday, citing people with knowledge of the matter, that Delta had agreed to sell and lease back aircraft valued at $1 billion as part of efforts to raise cash while it continues talks about U.S. government aid.

Delta did not comment on the report.

Reporting by Tim Hepher, Tracy Rucinski and Marcelo Rochabrun; Editing by Jason Neely, Grant McCool and Peter Cooney

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