Boeing Co. (IW 500/9) won orders for 39 wide-body aircraft from Singapore Airlines Ltd. as Southeast Asia’s biggest long-distance carrier upgrades its fleet over the next decade with more fuel-efficient models in an effort to cut costs.
The airline agreed to buy 20 777-9s, which are set to debut at the decade’s end, and 19 787-10s, the longest Dreamliner model, for $13.8 billion at list prices that don’t reflect customary discounts, Singapore Air said in a statement on Thursday. Boeing was nearing an order for at least 35 wide-body aircraft from Singapore Air, Bloomberg News reported Wednesday.
Deliveries of the jets will start as early as in the financial year ending March 2021, the carrier said, adding it also has options to buy six more of each of the two models.
The new deal would provide a critical boost to two high-profile Boeing products amid a tough market for twin-aisle jets. The Chicago-based company has been working hard to land sales of its upgraded 777X family after twice announcing it would cut output of current models. The new aircraft will replace some of Singapore Air’s aging Boeing planes such as the 777-300ER, while giving the carrier’s low-cost units rights to jets not yet on the market.
“Singapore is a deeply respected long-haul carrier, both in terms of brand quality and technical proficiency,” said Richard Aboulafia, an aerospace analyst with Fairfax, Virginia-based Teal Group. “It would be a fantastic endorsement.”
Shares of the airline rose 1.4% to S$9.94 on Thursday in Singapore trading before the announcement.
Courting Business Travelers
Singapore Air has ordered 67 of the A350-900 jets, including an ultra-long range version, as it courts business travelers with non-stop service to markets such as New York and Los Angeles.
The Asian carrier’s current fleet includes 10 A350s, which Airbus says consume 25% less fuel than Boeing’s 777 aircraft, with 57 more on order. The airline already has 30 787-10s on order, according to Boeing’s website.
Singapore Air has also reviewed a proposed, longer version of the twin-engine 777 that would carry as many as 450 passengers, a load previously handled only by four-engine jumbo jets, Bloomberg News reported Wednesday.
Buffeted by marquee Middle Eastern peers such as Emirates and regional budget operators, the only Asian carrier to have flown the Concorde has said it will maintain vigilance over its costs. Singapore Air, following two consecutive quarters of decline in profits, said Tuesday that 2017 will be another challenging year amid “tepid global economic conditions and geopolitical concerns.”
The carrier is the launch customer for the 787-10, the first Boeing jetliner to be manufactured solely at its new North Charleston, S.C., campus. Deliveries are slated to begin next year. Singapore Air’s unit Scoot currently flies the carbon-composite 787-800 and 787-900 variants of the Dreamliners.
By Julie Johnsson, Andrea Rothman and Benjamin Katz