Singapore Airlines places $14 billion wide-body Boeing order
By Anshuman Daga and Tim Hepher
SINGAPORE/PARIS (Reuters) - Singapore Airlines (SIA) SIAL.SI announced a provisional order worth $13.8 billion at list prices to buy 39 Boeing (BA.N: Quote) wide-body planes on Thursday as it battles Gulf carriers, dealing a blow to Airbus (AIR.PA: Quote) in the key market for big twinjets.
SIA signed a letter of intent with Boeing for 20 777-9s and 19 787-10s to tap additional passenger growth and to modernize its fleet over the next decade. Additional options for the two aircraft types could take the deal to as many as 51 aircraft.
The preliminary order is a boost for Boeing as it seeks to restore momentum for the newest version of its long-haul 777, which after a strong debut has not had a firm order in 20 months.
It is also expected to shore up export-related U.S. jobs at a time when domestic manufacturing employment is a sensitive political issue under U.S. President Donald Trump.
"The carrier is a demanding customer, and its fleet decisions usually define market trends in the intermediate term," said Jefferies analyst Howard Rubel in a note.
Airlines typically get discounts on jet orders and Rubel estimated the deal's net value closer to $6.5 billion or about a tenth of the U.S. planemaker's annual volume.
"While the deal may have been highly competitive, it is business in part of the market that strengthens Boeing's positioning," he said.
The agreement, however, leaves a question mark over Airbus proposals to develop a larger 400-seat version of its A350 passenger jet to compete with the 406-seat Boeing 777-9. Continued...