Delta bumps A321neo order book, secures payroll support

Delta Air Lines (DL, Atlanta Hartsfield Jackson) has expended its A321-200N order book after it firmed 25 purchase rights while adding 25 more. The US carrier said in a press release that with this change, its A321neo order book now consists of 125 firm aircraft with 100 purchase rights. The first of the type is expected to deliver during the current semester of the year. Delta’s A321neo will be powered by Pratt & Whitney PW1133G-JMs and will be equipped with 194 seats in total with 20 in business, 42 in premium economy, and 132 in economy. The new jets will be deployed primarily across Delta’s domestic US network, complementing its current fleet of 115 A321ceo. As part of the deal with Airbus (AIB, Toulouse Blagnac), the US carrier also managed to accelerate the delivery of two A350-900s and two A330-900s to the second half of 2022. Currently, the ch-aviation fleets advanced module shows Delta has nine A330-900s in service with 28 more due for delivery while its A350-900 fleet entails 15 delivered and 10 outstanding orders. Meanwhile, Delta said in a separate statement that it had secured yet more payroll support from the US government, this time for USD3.1 billion. Under its Payroll Support Program 3 (PSP3) agreement with the US Department of the Treasury signed on April 23, the airline has secured USD2.2 billion in grants and USD890 million as an unsecured 10-year loan. Delta received the first instalment of USD1.5 billion under the agreement on April 23, 2021, and expects to receive the balance in the June quarter. The loan’s interest rate is set at 1.00% per annum for the first five years (i.e. through April 23, 2026) moving to an applicable secured overnight financing rate plus 2.00% per year in the final five years. Approximately 70% of the payment received on April 23, 2021, was in the form of a grant, and approximately 30% was in the form of an unsecured loan. Delta issued a promissory note to the US Treasury on April 22, 2021, for approximately USD430 million with respect to the term loan, which will increase to its full principal amount as the balance of payroll support payments is received. As a part of the PSP3 Agreement, Delta has also agreed to issue the US Treasury with warrants to acquire approximately 1.9 million shares of Delta common stock. Approximately 50% of the warrants were issued on April 23, 2021, with the remainder to be issued as the balance of payroll support payments is received. The warrants have an initial exercise price of USD47.80 per share (the closing price of Delta’s common stock on March 10, 2021), subject to adjustment in certain cases, and a five-year term. The warrants issued under the PSP3 agreement represent less than 0.3% of Delta’s outstanding common stock upon exercise. Combined with warrants issued or to be issued through prior payroll support programs, they would represent less than 1.7% of Delta’s outstanding common stock upon exercise.