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.
Delta has just opened its first private check-in lounge at Los Angeles Airport. The upgrade is part of a three-year project costing $229 million. The new terminal will offer increased privacy for celebrity passengers, including a private, curbside entrance.
Delta President Ed Bastian said that the investment will now offer travelers to and from the area "a more premium airport experience, from check-in to take-off."
On July 9, Delta will also introduce a new flight to Shanghai, China.