Business Essentials for Professionals


$13.8 Billion Singapore Air Order has Boeing as the Front Runner: Bloomberg

$13.8 Billion Singapore Air Order has Boeing as the Front Runner: Bloomberg
Amid a battle with Chinese and Middle Eastern carriers and as Singapore Airlines Ltd. closes in on an order for at least 35 wide-body aircraft, Boeing Co. is the front-runner for the order, reports Bloomberg News.
The report quoted people with knowledge of the mater saying that after studying a rival bid for Airbus Group SE’s A350 aircraft, Southeast Asia’s biggest long-distance carrier is considering buying 20 of Boeing’s long-range 777-9 jets, which are set to debut at decade’s end. Sources also said that 19 of the longest of the Dreamliner model - the Boeing 787-10, is also being planned to be bought by the carrier.
Before the discounts that are customary in the industry, those aircraft would be valued at $13.8 billion based on list prices. The order could be unveiled this week.
After two consecutive quarters of declining profit, Singapore Air has been seeking more fuel-efficient aircraft as crude oil prices show signs of a rebound and has been under pressure to cut costs. While giving Singapore Air or its low-cost subsidiaries rights to Boeing aircraft not yet on the market, the aircraft to be purchased would replace aging Boeing models such as the 777-300ER. There were no comments from representatives of Singapore Air and Boeing.
“The global trend is to replace inefficient planes with efficient ones,” said K. Ajith, an analyst at UOB Kay Hian Pte in Singapore. “This move is to bring down their cost.”
Rivals like Emirates are luring first- and business-class passengers with comforts like in-flight showers and the marquee airline is competing against such rivals. On the other hand budget-minded travellers are being attracted by discount airlines. And as Singapore Airlines courts business travelers with non-stop service to markets such as New York and Los Angeles, it also has ordered 67 of Airbus’s A350-900 jets, including an ultra-long range version.
Amid a tough market for twin-aisle jets, the new deal would provide a critical boost to two high-profile Boeing products. After twice announcing it would cut output of current models, the Chicago-based company has been working hard to land sales of its upgraded 777X family.
At present, the Asian carrier has 58 A350s on order as of Jan. 1 and used nine A350s. The manufacturing company says that A350s consume 25 percent less fuel than Boeing’s 777 aircraft.
With ability to carry as many as 450 passengers, a load previously handled only by four-engine jumbo jets, Singapore Air also has reviewed a proposed, longer version of the twin-engine 777.
The 787-10, the first Boeing jetliner to be manufactured solely at its new North Charleston, South Carolina, campus, is used first by the carrier.
To mirror the drama-free development of the 737 Max and 787-9 three years ago, Bottom of Form
Boeing is counting on the -10. Fashioned after the delay-plagued debut of the 787-8 five years ago, the products are of a disciplined development process for new aircraft. The market entry of the new jet should coincide with increased profits for the 787 and it is the most expensive Dreamliner yet, with a list price of $306.1 million.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc