Singapore Airlines, the first carrier to fly the Airbus SAS A380, agreed to order five more superjumbos and 20 A350-900s to expand its fleet and add fuel- efficient planes.
The 25 aircraft, which start arriving in 2017, are worth US$7.5 billion ($9.2 billion) at list prices, the carrier said in a statement today. Planemakers usually give discounts from catalog prices. The airline also previously ordered 20 A350-900s that are due to be delivered starting in 2015.
The carrier, which already operates 19 A380s, is adding more of the superjumbos as Thai Airways International Pcl, Malaysian Airline System Bhd. and Emirates deploy similar planes in a bid to lure its lucrative business travelers. The new Rolls-Royce Holdings Plc-powered aircraft will also let Singapore Air replace older models in its fleet following a 35% jump in fuel prices over the past two years.
“The A380 is well recognized and regarded in the Asia- Pacific region, especially now that a lot of the competitors are using it,” said K. Ajith, a Singapore-based airline analyst at UOB-Kay Hian Research. “The question now is how is SIA going to sell off older planes.”
REPLACING 777s
The new aircraft will probably replace some of Singapore Air’s Boeing Co. 777-200s and -300s, Ajith said. The airline has 69 777s in its fleet, including 19 -300ERs, the latest passenger version, according to its website. The carrier booked a loss from retiring its last 747-400 plane in the quarter ended March.
Airbus will acquire Singapore Air’s five A340-500s as part of the new order. These planes will leave the carrier’s fleet in fourth quarter of next year, forcing the end of non-stop services to Los Angeles and Newark.
The carrier will also transfer 20 on-order Boeing Co. 787s, due to start arriving in 2014, to low-cost arm Scoot from the main Singapore Air unit. Scoot began services using 777 planes in June. Singapore Air’s regional unit SilkAir separately signed a provisional agreement for 54 Boeing 737 planes in August.
Singapore Air rose 0.8% to $10.65 in Singapore trading today, before the earnings announcement. It’s gained 4.8% this year, trailing a 15% jump for the Straits Times Index.
The A380 order is only the second this year for Toulouse- based Airbus, following a contract for four in June from Russian carrier Transaero Airlines. The planemaker had a goal of selling 30 this year. It had sold 257 A380s as of the end last month, of which 84 had been delivered, according to its website.
FIRST FLIGHT
Singapore Air made the first commercial flight with an A380 in 2007. The airline has carried more than 9 million passengers on superjumbos since then, according to the statement. The planes are used on flights to cities including London, Frankfurt, Hong Kong Sydney and New York.
“This major order will provide us with additional growth opportunities and is consistent with our longstanding policy of maintaining a young and modern fleet,” Chief Executive Officer Goh Choon Phong said in the statement. “It demonstrates our commitment to the Singapore hub, and our confidence in the strength of the market for premium full-service travel.”
Malaysian Air and Thai Air have both begun flying their first A380s in the past few months. Emirates, the biggest operator of the superjumbos, will begin using A380s on flights to Singapore in December.
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