Singapore Air to Buy Up to 31 Boeing Planes for $7.35B

Singapore Airlines Ltd., the world's second most valuable airline, said on Wednesday it planned to buy up to 31 Boeing Co.'s (BA777-300ER (search) planes worth about $7.35 billion to support growth plans.

The aircraft, 18 of which are to be ordered for delivery between 2006 and 2010, will be powered by huge engines from General Electric Co. (GE), Asia's most profitable airline said.

The remaining 13 are subject to the exercise of purchase rights, it said.

Singapore Airlines (search), known for a young fleet and premium service, had asked airframe manufacturers Boeing and Airbus SAS (search) in February to tender for an order.

The 777-300ER is the world's largest twin-jet, offering low maintenance by having just two enormous engines but long range and almost the seating capacity of the four-engine Boeing 747-400 jumbo. It competes with Airbus's A340-600.

"With its use of new generation avionics and materials, and its higher operating efficiency, the B777-300ER will deliver lower operating costs," said Singapore Airlines' Chief Executive Officer Chew Choon Seng.

The order would allow the airline to achieve capacity growth of 4 to 6 percent a year, the company said. It would cover the medium- and long-haul needs of the 57 percent government-owned airline over coming years.

Singapore Airlines, Boeing's largest customer for the 777 aircraft, has a fleet of 89 planes, including 55 Boeing 777s, 29 Boeing 747s and five Airbus A340-500s, with firm orders for an additional four B777s.

The airline also has 10 of Airbus' colossal 555-seat A380s on order, and plans in the spring of 2006 to become the world's first carrier to fly the plane.

Rolls-Royce Group Plc. (search) supplies engines for Singapore Airlines' other 777s but does not offer an engine for the 777-300ER, a heavyweight version.

The order should help Boeing, currently number-two maker of jetliners, in its fight to regain some market share from Airbus, the world's largest maker of civilian aircraft.

Chew said the evaluation process had been comprehensive and the competition between Airbus and Boeing for the order had been very keen.

In less than a decade, Boeing's share of the market for large commercial aircraft has dropped from 80 percent to less than half, while Airbus' share has shot to just over 50 percent.

Chew said the acquisition would be financed largely from internal cash flows but the airline might consider options such as leasing or debt financing if terms were attractive.

The carrier also said it had decided not to place new orders for regional aircraft despite asking for proposals from the manufacturers earlier.

It said the airframe makers have offered the Airbus A330-200 and the new Boeing 7E7 for evaluation but the proposals did not meet the carrier's financial criteria. Airbus is co-owned by European aerospace company EADS and Britain's BAE Systems.