Boeing to Get Singapore Order for 18 Long-Range 777s

[Wirraway]

Bloomberg

Boeing to Get Singapore Order for 18 Long-Range 777s

Aug. 24 (Bloomberg) -- Boeing Co., the world's second-largest commercial-aircraft maker, won a $3.7 billion order from Singapore Airlines Ltd. for 18 long-range 777s, beating out Airbus SAS, said people familiar with the plan.

General Electric Co. will supply the engines, in a $540 million order that would be its first from Asia's most-profitable carrier. An agreement in principle will be announced tomorrow, the people said.

The sale cements Boeing's position as the airline's leading supplier. Singapore Airlines' fleet already includes 53 777s and only five Airbus A340s. Singapore Airlines is luring more passengers as tourists and business travelers return to the Southeast Asian region after the severe acute respiratory syndrome outbreak emptied flights last year.

Singapore Airlines "obviously expects some pretty heavy traffic,'' JSA Research analyst Paul Nisbet said. "They prefer the 777s. It's probably more efficient on the longer routes.'' Nisbet has a "buy'' rating on Boeing's shares, which he said he doesn't own.

General Electric, the world's biggest maker of engines, is the only supplier of engines for the 777-300ER, which with a range of 8,500 nautical miles is Boeing's longest-range model. The engines list at $15 million each.

The order is the first sale of 777s to the airline with General Electric engines. Rolls-Royce Plc is the engine supplier for all of the 777s in Singapore Airlines' current fleet.

Asia Market

Singapore Airlines is Asia's biggest by market value and No. 2 by that measure worldwide, after Southwest Airlines Co. Its Airbus planes all have Rolls-Royce engines. The carrier also owns 29 747-400s powered by Pratt & Whitney engines.

Dow Jones News Service reported the Singapore Airlines agreement earlier. Rolls-Royce and General Electric declined to comment. Spokespeople at Boeing and Airbus also declined to comment.

Airbus last year overtook Chicago-based Boeing to become the biggest aircraft maker after it delivered 305 planes to Boeing's 281. The European planemaker probably will maintain its lead for the new few years with an order book of about 1,400 planes compared with 1,037 for Boeing.

This year Airbus, based in Toulouse, France, will deliver more than 305 planes, Chief Executive Officer Noel Forgeard said at the Farnborough Air Show last month, compared with 285 planned by Boeing.

Boeing in Asia

Boeing helped build a place for its 777 in Singapore Airlines' fleet when in 1999 it won a $1.9 billion order for that model partly by agreeing to buy from the Asian carrier some jets made by rival Airbus.

The airline exercised options taken four years earlier for 10 twin-engine 777 jets and as part of the deal, agreed to buy from the airline 17 Airbus A340-300 jets--a 777 competitor. Many of the jets hadn't even yet been delivered to Singapore.

To contact the editor responsible for this story:
Rob Urban in New York [email protected]
Last Updated: August 24, 2004 16:19 EDT

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[Transition Layer]

Boeing Co., the world's second-largest commercial-aircraft maker

Who would have thought 10, or even 5 years ago?

[Triple 7]

Dont worry Boeing will bounce back in the next few years. There is more to come from this region i can assure you of growth like nothing else. Its on for young and old.

[Wirraway]

Bloomberg

Boeing Wins Order From Singapore, Fails to Sell 7E7

Aug. 25 (Bloomberg) -- Boeing Co, the world's second-biggest maker of commercial aircraft, won a $3.6 billion order for 18 planes from Singapore Airlines Ltd., which decided not to buy any of Boeing's new 7E7 model.

Singapore Airlines said in a statement that it signed a letter of intent to take delivery of the 777-300ER models between 2006 and 2010. The model holds 365 passengers and can fly as far as 8,500 miles. The airline also acquired options for 13 more.

Chicago-based Boeing has won orders for 159 planes this year while Airbus SAS, based in Toulouse, France, has sold 117. Both companies expect to increase aircraft production in the next two years as traffic rises and airlines become more profitable. Singapore Airlines has 55 777s in its fleet of 89 aircraft, which also includes 29 Boeing 747s and five Airbus A340-500s.

"Flying direct on longer routes is becoming a trend and that's why Singapore Airlines is moving in that direction,'' said Chan Hock Fai, who helps manage $2.3 billion at Singapore-based APS Asset Management. "The industry is getting more challenging because of the budget carriers and that's going to lower volume and margins for the existing airlines for the shorter routes.''

Boeing's shares rose $1.59, or 3.1 percent, to $52.50 in New York Stock Exchange composite trading. They had risen 43 percent over the past year.

Boeing's order total doesn't include the Singapore Airlines agreement because it isn't final. Including the options, the order is worth about $7 billion, for a total of 31 planes.

`Financial Criteria'

The airline decided not to buy Boeing's new 7E7 ``Dreamliner'' because it "did not meet'' its ``financial criteria,'' Singapore Airlines said in its statement.

Boeing is counting on Asian carriers to buy the 200-seat to 300-seat 7E7 because of the long routes they tend to fly. Boeing recorded its first 7E7 order in July from Tokyo-based All Nippon Airways Co. for 50 7E7 models that Boeing says will be more fuel- efficient and comfortable than the similar-sized planes.

Singapore Airlines, which operates 87 passenger aircraft, is focusing on improving service on flights to London, Los Angeles and other intercontinental routes as no-frills airlines such as Malaysia's AirAsia Sdn. and Singapore-based Valuair Ltd. expand in Southeast Asia.

Singapore Airlines, which plans to finance the plane purchases with its own cash, said it would also consider leasing or debt financing.

General Electric Co. will supply GE90-115B engines for the new planes, which will be its first from Singapore Airlines. The engine order, including spares, is worth $800 million, General Electric said.

Long-Haul Competition

Dubai-based Emirates, which plans to double its fleet to 139 planes by 2011, last month bought four 777 aircraft with an option for nine more. Hong Kong-based Cathay Pacific announced earlier this year plans to buy and lease eight new planes from Boeing and larger rival Airbus SAS to expand in the Asia-Pacific.

Airlines are trying to reduce their costs, including spending on aircraft, as fuel prices soar to record highs, analysts said.

"Airlines in the region are becoming much more aggressive about price,'' said Peter Hilton, an analyst at Credit Suisse First Boston in Hong Kong. ``Singapore Airlines is aggressively reviewing its cost base to make sure it's as competitive as it can be in this environment.''

Improving Service

Singapore Airlines also is focusing on improving service on flights to London, Los Angeles and other intercontinental routes as no-frills airlines such as Malaysia's AirAsia Sdn. and Singapore- based Valuair Ltd. expand in Southeast Asia.

Singapore, a key refueling stop on the so-called kangaroo route between Australia and the U.K., has open-skies agreements with the U.S., New Zealand, Brunei, Chile and Peru, allowing Singapore Airlines to use each country as bases to fly to other destinations and vice-versa.

Singapore's government has been negotiating for a full open- skies agreement with Australia, which would allow the carrier to fly non-stop from Australia to the US. The city state has said keeping Changi airport's hub status is a national priority.

In order to counter expansion plans by its rivals, Singapore Airlines must "be one of the leaders in launching this range of services,'' said Mark Tan, an investment analyst at UOB Asset Management Ltd. in Singapore, which manages $3.5 billion of assets. "They want to capitalize on this new trend and get a slice of this pie.''

Singapore's Loss

Last month, Singapore Airlines reported a fiscal first-quarter profit of S$259 million ($151 million) compared with a loss of S$312 million, as passenger and cargo loads rose. Shares of Singapore Airlines were unchanged at S$11. The stock has dropped 1.8 percent this year.

Chief Executive Officer Chew Choon Seng said in June that the carrier may order as many as 50 twin-aisle planes from Chicago- based Boeing, the world's second-largest commercial plane maker, or larger rival Airbus, to renew and expand its fleet.

Singapore Airlines currently has 55 777s in its fleet of 89 aircraft, which also includes 29 Boeing 747s and five Airbus A340- 500s. The airline will also be the launch customer for Airbus's 555- seat A380 super jumbo.

Lower Costs

"With its use of new generation avionics and materials, and its higher operating efficiency, the 777-300ER will deliver lower operating costs,'' Chew said in today's statement. "It should integrate well with our existing fleet.''

Airbus last year overtook Boeing to become the biggest aircraft maker after it delivered 305 planes to Boeing's 281. The European planemaker probably will maintain its lead for the next few years with an order book of about 1,400 planes, compared with 1,037 for Boeing.

Airbus, based in Toulouse, France, will deliver more than 305 planes this year, Chief Executive Officer Noel Forgeard said at the Farnborough Air Show last month, compared with 285 planned by Boeing.

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[Wirraway]

Fri "The Australian"

SIA, Thai splurge billions on planes
By Steve Creedy, Aviation writer
August 27, 2004

BIG aircraft orders from Singapore Airlines and Thai Airways International yesterday underscored the potential for growth in the Asia-Pacific aviation industry.

Thai became the latest regional airline to acquire the Airbus A380 when its board gave approval for six of the double-decker planes as part of a 96.3 billion baht ($3.27 billion) order.

Thai will also acquire an Airbus 340-500, and A340-600 and six Boeing 777-200ERs as part of the deal.

Singapore Airlines will acquire up to 31 long-range Boeing 777-300ER aircraft with a list price of $US7.35 billion in a move designed to allow it to increase capacity by up to 6 per cent annually.

The order is a significant win for Boeing over its European rival.

SIA has firm orders for 18 of the General Electric-powered 777s, to be delivered between 2006 and 2010. They seat 350 people and have a range of up to 7000 nautical miles. The order confirms SIA, which flies 55 B777s and has another four on firm order, as the aircraft's biggest customer.

The long-range aircraft will be deployed on SIA's medium and long-haul routes.

It will also allow the airline to maintain one of the industry's youngest fleets, with the age now averaging about five years.

SIA chief executive Chew Choon Seng said there had been a comprehensive evaluation process, with keen competition between Airbus and Boeing.

"With its new-generation avionics and materials, and its higher operating efficiency, the B777-300ER will deliver lower operating costs," he said. "It should integrate well with our existing fleet."

SIA expects to finance the purchase from internal cash flow but could consider leasing or debt financing options.

The Singaporean carrier also considered the A330-200 and Boeing's 7E7 for regional routes.

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