Rivals Southwest, Delta strike plane deal

Southwest Airlines may be fighting Delta Air Lines for Atlanta passengers, but behind the scenes the two have struck a deal for Southwest to hand off 88 jets to its larger rival .

The unlikely partnership stems from Southwest's in-progress takeover of  AirTran Airways.

Southwest has long operated an all-Boeing 737 fleet, a strategy that simplifies operations and lowers costs such as maintenance and training . AirTran, on the other hand, had both Boeing 737s and smaller Boeing 717s.

Southwest executives have been ruminating over what to do with the 117-seat Boeing 717s, and how to offload them.

Enter Delta. Airlines sometimes try to avoid handing over planes to fuel a competitor's growth. But Delta had been considering how to retire more of its small 50-seat regional jets and old DC-9 planes, which are less efficient and more costly to operate than larger planes. The 717 could be a good replacement, making Delta a candidate to take on the AirTran jets Southwest didn't want.

Under the tentative deal reached between Delta and Southwest, Delta will gradually take on all of Southwest's 88 Boeing 717s by 2015, subleasing the planes from Southwest. Since they will replace smaller or older planes, they won't add to Delta's capacity. Delta declined to release financial terms of the deal.

However, Delta said the deal will increase customers' chances to get upgrades, since the 717s will have first class and most regional jets don't.