Boeing wins over all-Airbus customer in Singapore
Boeing won agreements to sell 94 single-aisle 737 planes to Asian carriers, including a commitment from a Singapore Airlines unit that has an all-Airbus fleet.
Boeing won agreements to sell 94 of its single-aisle 737 planes to Asian carriers, including an accord with a Singapore Airlines unit that has an all-Airbus SAS fleet.
SilkAir, Singapore Air's regional arm, said Friday it committed to buy 54 737s, including 31 of the new Max 8, while a China Southern Airlines unit ordered 40 737-800s. The deals' list value is $8.3 billion, from which the carriers typically would get discounts.
"It is a big positive for Boeing that they have managed to get the confidence of Singapore Airlines," said Ahmad Maghfur Usman, an analyst at OSK (Asia) Securities in Kuala Lumpur. "Going forward, Singapore Air will continue to order Boeing."
The deal is a boost for Boeing as the company and Airbus revamp their narrow-body models to compete in the biggest segment of the global aircraft market. Boeing has amassed more than 1,200 orders and commitments for the Max since the jet's 2012 unveiling, of which 649 were firm as of July 31.
SilkAir's purchase will be tallied on Boeing's orders and deliveries website once the transaction is confirmed, according to a statement from the plane maker.
Boeing stock rose 1.1 percent to $72.81, lagging the broad rally in U.S. indexes.
The SilkAir accord, which also includes purchase rights for another 14 aircraft, will more than double its fleet by the end of 2021. The carrier now has 21 planes from Airbus's A320 family, with three more due to be delivered by the end of next year.
"It's quite an aggressive order," said Ahmad. It also suggests that SilkAir may take over most of Singapore Air's operations within Asia, he said. The main Singapore Air unit may then fly only a few key regional routes besides its long-haul service, he said. The main unit has both Airbus and Boeing planes.
The new Boeing planes, which will begin arriving in 2014, will add capacity and replace older aircraft, SilkAir said.
"We continue to see very strong growth within the region and these new aircraft will position SilkAir well," said its CEO, Marvin Tan, in a statement. The carrier undertook "detailed evaluations and extensive negotiations with both Airbus and Boeing" before placing the order, he said.
Xiamen Airlines, which is 51 percent owned by China Southern, will receive its 40 Boeing planes from 2016 to 2019, according to a statement. The carrier is China's only all-Boeing operator, with 81 planes, according to website.
The 737 MAX, which is due to enter service in 2017, will be more fuel efficient than the current model after upgrades that will include new engines. Airbus is making similar alterations for its A320neo, which is due to begin commercial flights in 2015.
Airbus previously has sold the A320neo to all-Boeing operators. Norwegian Air Shuttle ASA ordered 100 neo planes in January, ending its reliance on Boeing. The carrier ordered 122 737s at the same time. PT Garuda Indonesia's Citilink unit last year placed an order for 25 A320s, including 10 neo planes, to replace its fleet of 737s.
Agreement clears way
for first Air India 787s
Air India is to begin receiving 27 on-order Boeing 787s after the government approved a compensation agreement between the plane maker and the state-owned carrier for delivery delays.
The accord was accepted at a Cabinet committee meeting Friday, according to a government statement, which didn't give financial details or say when deliveries would begin. Further compensation for failure to meet performance guarantees will be sought separately, it said.
Air India had asked for $840 million after Boeing's struggles to adopt new materials and production techniques for the 787 caused more than three years of delivery delays. The handover of the first plane slipped further because of compensation talks, costing Air India its spot as the second operator of the aircraft.
Boeing delivered the first 787 to All Nippon Airways in September. It had handed over another 14 to ANA and Japan Airlines as of the end of last month, according to its website.