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Boeing in talks for landmark Delta MAX order

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© Reuters. FILEPHOTO: Delta Air Lines planes parked at Hartsfield Jackson International Airport Atlanta, Georgia U.S.A, October 27, 2020. REUTERS/Brian Snyder/File Photo

Eric M. Johnson and Rajesh K. Singh

(Reuters) – Boeing (NYSE) Co is moving towards a historic order from Delta Air Lines(NYSE:) to purchase up to 100 of its 737 MAX10 jets. This model is being fought in separate negotiations to be approved prior to year-end rules changes.

If the deal is confirmed it would mark the first Delta order for Boeing’s most-sold single-aisle aircraft family and also the first Boeing major order in over a decade.

This happens as Delta, the US’s only major carrier with no 737 MAX order, restructures its fleet to prepare for a quick recovery from the pandemic.

Boeing and Delta have had a strained relationship over the years. They are currently working together to finalize details for an order of up to 100 aircraft. Many or all could include the largest variant of the 737 MAX 10. Two people confirmed this.

One person said that if a deal is made, it could be announced as early as next month.

Boeing and Delta refused to comment.

According to industry sources, negotiations are often very close and there has not been a final decision. There have been rumors about Delta placing a MAX order in the past but there was no agreement.

Airbus’ most popular model, A321neo, is the MAX 10. The planes target the rapidly-growing market of just over 200 seats.

Air Lease (NYSE Name:) has called the A321neo “the hottest aircrafts on the market” Wednesday. While the A321neo has an impressive lead in sales and Boeing has scored several contract wins over the past year.

Airbus declined to comment.

Airline Weekly’s September issue quoted Ed Bastian, Delta Chief Executive as saying that the MAX could be accommodated at Delta if it was possible to find a way.

When asked about London’s MAX earlier in the month, he said that Delta is always interested in all types of airplane models.

CERTIFICATION TALKS

Boeing, which has been ensconced in wider certification and industrial headaches for decades, would be able to secure a significant new customer for its cash cow narrowbody.

A separate, but more important battle is underway to get certification for the MAX 10, before a new safety standard regarding cockpit alerts goes into effect.

After the 2018 and 2019 fatalities of smaller MAX models, Federal Aviation Administration introduced a deadline to make changes.

Boeing met with lawmakers to discuss the possibility of asking for additional time. However, Boeing did not seek an extension to resolve a flight deck problem, according the people.

When asked about this possibility, an FAA spokesperson stated that “safety dictates when certification projects are scheduled”.

If the FAA fails to certify MAX by end-year, only Congress can extend that deadline.

Boeing discussed with legislators the possibility of a reduction in jobs and production if the 737 MAX 10 was not approved.

“We continue to work transparently with the FAA to provide the information they need, and we are committed to meeting their expectations to achieve 737-10 certification,” Boeing said in an emailed statement.

The company did not make any comments on the talks with lawmakers, but stated that it would support “tens and thousands of jobs at Boeing as well as across our supply chain, which includes in Washington”.

This issue will likely become a topic of contention during confirmation hearings for the next FAA administrator. Steve Dickson, the current FAA administrator is due to step down in March.

The Seattle Times reported this month that a Boeing submission had been submitted to the FAA. It cited an estimated cost of compliance for the MAX at more than $10 billion.

(The story reviles to modify the March 18 dateline.

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