NEW YORK (The Street) -- Delta (DAL) has announced that it will buy 40 737-900ER planes from Boeing (BA) in a deal valued at around $4 billion dollars. If sold separately, the models list at around $99 million dollars each.
The new aircraft will carry around 220 passengers and will replace some of Delta's narrow-bodied planes that are scheduled for retirement.
The new order will bring Delta's 737 tally up to 140. The airline will also add 20 previously-used Embraer (ERJ) jets to its fleet, which will commence flying along domestic routes from the fourth quarter of 2016.
Larger regional planes are a welcome addition for airlines, as more passengers means lower costs.
The Atlanta-based airline will now be able to deploy some of its smaller, 70-seater regional jets to shorter routes.
The new three-year contract proposal will be voted on by Delta's pilot union on Wednesday. Updated terms also include an increase in base salary for pilots and a revised profit-sharing formula.
In response to the deal negotiations, J.P. Morgan has now cut its third-quarter earnings estimates for Delta by 10 cents a share.
Delta stock rose around 1% following the deal news, but recently traded at $40.91, off 15 cents, or 0.37%. Boeing recently rose 1% to $143.04.
The additional aircraft will create more jobs for Delta pilots, but fewer for their regional partners who would traditionally fly the smaller planes.