Boeing Co. (BA)
reached agreements to sell 94 of its single-aisle 737 planes to Asian carriers,
including an accord with a Singapore Airlines Ltd. (SIA) unit that has an all-
Airbus SAS fleet.
SilkAir, Singapore Air’s regional
arm, said today it committed to buy 54 737s, including 31 of the new Max 8,
while a China
Southern Airlines Co. (1055)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
Chicago-based companyand 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 websiteonce the transaction is confirmed, according
to a statement from the planemaker.
Boeing rose 1.1 percent to $72.81 at
the close in New York,
joining a rally in broader U.S. indexes. The shares had fallen 1.9 percent this
year through yesterday.
SilkAir
Expansion
The 737 accord, which also includes
purchase rights for another 14 aircraft, will more than double SilkAir’s fleet
by the end of 2021 as rising wealth spurs travel in Asia. 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 SilkAirmay
take over most of Singapore Air’s operations within Asia, he said. The main
Singapore Air unit may then fly only a few of the most-important 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 be used to expand 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,”
the unit’s Chief Executive Officer Marvin Tan said in a statement. The carrier
undertook “detailed evaluations and extensive negotiations with both Airbus and
Boeing” before placing the order, he said.
Xiamen
Airlines
Xiamen Airlines, which is 51
percent-owned by ChinaSouthern,
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
its 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 has previously 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 also last year placed an order for 25 A320s, including 10 neo
planes, to replace its fleet of 737s.
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