Boeing-Airbus Split $17 Billion Singapore Wide-Body Jet Purchase

Singapore Airlines (SIA) said on Thursday it will buy 30 Airbus and 30 Boeing aircraft in an order worth more than $17 billion dollars.

"Singapore Airlines has agreed to order 30 more Airbus A350-900s and 30 Boeing 787-10Xs in deals valued at more than US$17 billion," the airline said in a statement.

For Airbus, the deal includes an option to purchase 20 more planes in addition to the 30 firm orders. The options can be converted to firm orders for bigger A350-1000s, it said.

The agreement with Boeing comprises 30 firm orders and is conditional upon the US aircraft maker formally launching the B787-10X programme, the airline added.

"Today's aircraft orders are among the biggest in Singapore Airlines' history, helping to ensure that we retain our industry leading position," said chief executive Goh Choon Phong.

"They demonstrate our commitment to the Singapore hub and our confidence in the future for premium full-service travel."

He said the new planes "will provide opportunities to grow and renew our fleet and enhance our network, benefiting customers by offering more travel options and the latest in-flight cabin products".

SIA is battling strong competition in the premium segment from Middle Eastern carriers and on the economy side from budget airlines, which have grown in number in the region.

The Airbus firm orders will be delivered from the 2016/2017 financial year and the Boeing planes from the 2018/2019 fiscal year, it said.

Rolls-Royce's Trent XWB is the sole engine type for the A350-900, while an engine selection for the B787-10Xs will be made later, the airline said.

SIA said it will use the Airbus planes for its medium and long-range routes and the Boeings for medium-range services.

Price Tag

The A350-900 has a list price of $287.7 million. Boeing hasn’t yet published list prices for the 787-10X, which would cost more than the smaller existing versions of the Dreamliner. The 787-8 retails for $206.8 million, and the 787-9 for $243.6 million, according to Boeing’s website. Airlines typically get discounts, particularly as launch customers.

“Boeing welcomes Singapore Airlines’ interest in the 787-10X, and we look forward to continuing discussions to satisfy their fleet requirements,” the company said by e-mail.

Boeing has designed the aircraft to replace its 777-200 and compete with the Airbus A350, which is due for its first flight within week.

“The 10X does about 90 percent of all of the missions flown today by a 777-200ER and it does it significantly better,” Ray Conner, chief of Boeing’s commercial airplanes unit, told investors last week. It will beat the per-seat operating cost of the current Airbus model, the A330-300, by 25 percent, he said.

Largest Variant

Adding the 787-10X, a so called double stretch on the initial 787-8 in service now and the -9 due next year, may force Boeing to add Dreamliner production capacity, Conner said last week. The -10X would seat about 43 more than the 250 to 290 passenger -9, Boeing has said.

The deal with Airbus, with deliveries from the 2016-17 financial year, is the third time the carrier has bought A350-900s and brings the total commitment to 70 jets. The company has not previously ordered the larger -1000 variant.

Airbus has booked 616 firm orders from 34 customers for its A350 family through April, including 110 firm commitments for the largest model, the -1000, with a deal from British Airways parentIAG SA (IAG) to take 18 not yet in the backlog.

The commitment continues a turnaround for the largest Airbus twin-engine wide-body that saw orders shrink to 62 last year after Etihad Airways PJSC canceled six. Since then, Cathay Pacific Airways Ltd. and Qatar Airways also have signed for the plane, along with Steven Udvar-Hazy’sAir Lease Corp. (AL)