|Your account||Today's news index||Weather||Traffic||Movies||Restaurants||Today's events|
Thursday, August 26, 2004 - Page updated at 12:00 A.M.
Singapore makes big 777 order, holds off on 7E7s
By David Bowermaster
After scrutinizing the technical specifications of the 7E7, which is due to enter service in 2008, Singapore decided the economics were not sufficiently compelling to place an order.
The absence of a 7E7 deal is likely to surprise the aviation industry. For months, industry gossip and news reports anticipated Singapore would be the next large 7E7 customer to follow All Nippon Airways' deal for 50 7E7s, which launched the program in April.
"[Singapore Airlines] has decided not to place any order for the regional aircraft because the proposals submitted did not meet SIA's financial criteria," the company said in a statement to the Singapore stock market. "The airline will continue to use the 777-200 to serve the regional routes."
The 7E7-3 is optimized for flights up to 3,500 nautical miles. The baseline, 7E7-8 model has a range of 8,500 nautical miles. Both can seat 217 passengers in three classes or 289 passengers in two classes.
Jim Higgins, an aerospace analyst with Credit Suisse First Boston, theorized Singapore might be waiting on the 7E7s until it sees whether the profitability of its intra-Asian routes declines as a new wave of low-cost airlines enters Asia in two to three years.
"We believe that Singapore is acknowledging the real possibility that low-cost-carrier competition, even in structurally fast-growing intra-Asian markets, will both stimulate incremental volume and take share from the incumbents," Higgins wrote in a research report to clients.
"While we're disappointed they didn't decide to make a decision about regional airplanes at this point, it doesn't mean they're not going to down the road," said Bob Saling, a Boeing spokesman. "We're going to hang in there and keep working with them."
Regardless, Boeing is extremely pleased Singapore selected the 777-300ER over the Airbus A340-600 for its high-capacity, long-haul routes, such as Singapore to Europe.
Singapore placed firm orders for 18 777-300ERs and options for 13 more. The deal would be worth roughly $7 billion at list prices if Singapore exercises all its options. "That's a nice order, a great victory," Saling said.
The planes will be delivered between 2006 and 2010. With room for 365 passengers in three classes, the 777-300ER will begin replacing some of Singapore's 29 747-400s, the oldest of which entered service in 1989.
By the time deliveries are complete, Singapore will have 77 777s in its fleet, making it the world's largest 777 operator.
The Singapore order helped push Boeing's stock price up $1.59, or 3.1 percent, to a 52-week high of $52.50 yesterday.
David Bowermaster: 206-464-2724 or email@example.com
Copyright © 2004 The Seattle Times Company
Home delivery | Contact us | Search archive | Site map | Low-graphic
NWclassifieds | NWsource | Advertising info | The Seattle Times Company
Back to top