SEATTLE – Singapore Airlines, Asia’s most important flag carrier, gave Boeing Co. some good news and bad news, ordering up to 31 of the airplane maker’s long-range 777 jets, but saying it would hold off on deciding whether to buy the new 7E7 Dreamliner.
The contract is a big win for Boeing in its dogfight with European rival Airbus. But the hesitation on the Dreamliner likely rankles the company, as Boeing’s commercial future is heavily reliant on the new model’s success.
Investors seemed unconcerned, however, sending shares of Boeing up $1.59, or 3 percent, to $52.50 in trading Wednesday on the New York Stock Exchange. Shares in Boeing have doubled since early 2003, despite a slight dip in March of this year.
As reported earlier, Singapore Airlines confirmed Wednesday that it had placed a firm order for 18 Boeing 777-300ER jetliners, to be delivered between 2006 and 2010. The company also said it had reserved the option to buy 13 more 777s.
In total, the deal would be worth $7.35 billion at list prices, including spare parts and spare engines. But airlines typically negotiate steep discounts.
The twin-engine 777-300ER – which stands for extended range – can seat about 350 passengers and is capable of such long-range routes as Los Angeles to Singapore.
Singapore Airlines chief executive Chew Choon Seng said Chicago-based Boeing and Airbus competed fiercely for that deal.
But the two manufacturers may continue to do battle over a deal to provide planes for Singapore Airlines’ regional routes. The airline said Wednesday that it evaluated proposals for both the 7E7 and Airbus’ A330-200, and that neither offer currently fits the company’s financial criteria.
Singapore Airlines spokesman James Boyd in Los Angeles said the company is considering both the price of the airplanes and the ongoing cost of operations. He said the company is not ready to make an award now but will continue to look at both companies’ offerings.
Analyst Paul Nisbet of JSA Research in Rhode Island said he suspects the delay could be because Airbus is pitching a new model airplane that would more closely rival the 7E7, which will seat between 217 and 289, depending on model and configuration.
Airbus spokeswoman Mary Anne Greczyn said the company still considers the A330-200 the primary competitor of the 7E7. She would neither confirm nor deny whether Airbus is considering offering a new model. The A330-200 seats 253.
Either way, Nisbet said the delay is a setback for Boeing. Singapore Airlines is known for thoroughly researching airplanes, he said, and others in the industry take their cues from it.
“It’s good for Boeing as far as the 777-300ER, but a delay in making a decision on the 7E7 may cause several other airlines to delay accordingly,” he said.
Aviation consultant Scott Hamilton said the delay, while disappointing, wouldn’t likely have a major impact on the long-term success of the 7E7.
“The 7E7 is a winner airplane,” he said. “This is the best thing that Boeing has come along with in a long time.”
Associated Press
Workers prepare to move a 777-300ER from the paint hangar at Boeing’s plant in Everett. Singapore Airlines, which ordered up to 31 of the planes, opted not to consider the 7E7 in the deal.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.