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TRADING & TECH
Singapore Airlines orders 'stretched' Dream-liners
SIA has placed an order to secure the first of 30 of the next generation Boeing 787’s, the 787-10X.
Singapore Airlines(SIA) has ordered the first stretched version of 787 Dreamliner, giving a ‘shot in the arm’ to Boeing’s plans to offer a 320 seat jet on crowded Asian routes. The stretched dreamliner was among the 30 Boeing and 30 Airbus aircraft that the airline ordered. The combined value of the 60 aircraft deal would be more than $ 17 billion at list prices and represents one of the biggest orders ever placed by the airline. This deal was confirmed by the chief executive, Choon Phong. In a boost to its Dreamliner programme, SIA has placed an order to secure the first of 30 of the next generation Boeing 787’s, the 787-10X. The order is contingent on Boeing proceeding with the project, the airline said. Boeing’s rival Airbus also received an order of 30 Airbus A350-900’s to be delivered from 2016-17. The 787-10X is designed to carry 40 more passengers than its predecessor 787-9, which has a seating capacity up to 290 passengers.
The order is seen as reaffirming SIA’s commitment to the premium and long haul market, where it has faced competition from the Gulf carriers, after it launched a low cost subsidiary, Scoot, in 2011. SIA is facing competition in Asia from fast growing and low fare airlines including Lion Air of Indonesia and Air Asia from Malaysia, which have also announced large aircraft orders. Its Middle East competitors include Etihad and Emirates.
Mr. Goh Choon Phong said “The new aircraft will provide opportunities to grow and renew our fleet and enhance our network; benefitting customers by offering more travel options and the latest in flight cabin products”. The project was grounded temporarily as Boeing struggled to return its pioneering plane to the sky after continous battery fires saw the entire worldwide fleet grounded earlier this year. However, since then Boeing has made changes in its battery systems. It has won the approval from the U.S. Federal Aviation Administration and its planes have started to fly again after the battery overhaul.
Aviation consultant John Strickland said “Singapore has had a significant part of its fleet made up of more expensive four engine aircraft which are too big for some routes. These orders will reduce the average capacity while putting it back in the leading edge of new generation long range twin jets which will offer superb operating economics without excess number of seats. This, combined with its legendary service reputation, should allow it to recover profitability and market share”. Like other airlines its net profit has come down drastically due to the economic slowdown, which has hit both passenger and cargo demand. The raising crude oil prices have also taken a toll on the airliner. Boeing has 890 firm orders for other models of Dreamliner.
Boeing’s shares shot up by 2% to $ 100.86 on Thursday. (30th May, 2013)
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