Boeing Wins $13.8 Billion Wide-Body Order From Singapore Air
Sale of 777X and longest 787 could be announced this week
(Bloomberg) -- Boeing Co. 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 said in a statement Thursday.
Deliveries of the jets will start as early as in the financial year ending March 2021, the carrier said, adding that 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’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.
The Singapore order also could influence other airlines, said Jefferies analyst Howard Rubel.
“The carrier is a demanding customer, and its fleet decisions usually define market trends in the intermediate term,” he wrote in note to investors. “The 787-10 order underscores the attractive operating features of the plane and expands the backlog for a plane that has yet to take its first flight. It probably underscores the airline’s confidence in the company’s ability to deliver the plane’s operating efficiencies.”
Boeing’s shares rose less than 1 percent to $164.40 at 9:58 a.m. in New York. Singapore’s stock advanced 1.4 percent to close at S$9.94 in Singapore, before the order was announced.
Business Travelers
Singapore 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.
Singapore 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, South Carolina, campus. Deliveries are slated to begin next year. Singapore’s unit Scoot currently flies the carbon-composite 787-800 and 787-900 variants of the Dreamliners.
--With assistance from Kyunghee Park To contact the reporters on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net, Andrea Rothman in Toulouse at aerothman@bloomberg.net, Benjamin Katz in London at bkatz38@bloomberg.net. To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Tony Robinson, Bruce Rule