November 15, 1995 in Nation/World

Boeing Gets Huge Order For 777 Jets Singapore Airlines Wants 77 Planes Worth $12.7 Billion

From Wire Reports
 

In a major victory for Washington’s largest private employer, Singapore Airlines said Tuesday that it would order as many as 77 Boeing 777 mid-sized commercial jets, with a total value of about $12.7 billion.

The airline has in the past purchased airplanes from both Boeing Co. and the European Airbus Industrie consortium and had been expected to split this order as well.

The order is the biggest commercial aircraft order ever in dollar terms, Borge Boeskov, Boeing’s vice president of product strategy, said at a press conference at the Dubai Air Show. The Singapore carrier said 34 of the orders were firm and the remaining 43 were options, with the aircraft scheduled for delivery between 1997 and 2004.

The order was also a coup for Rolls-Royce PLC, whose Trent engines will power 61 of the airplanes. No engine has been specified for the remaining 16 jets, which are earmarked for Singapore Aircraft Leasing Enterprise, the airline’s leasing subsidiary.

Boeing shares closed at $71.50 each Tuesday, down 25 cents, on the New York Stock Exchange, but had reached a 52-week high after Singapore Airlines announced on Nov. 2 that an order was imminent. The shares’ action may also reflect the month-old strike by Boeing’s machinists, analysts said.

Analysts said the order was both a strong endorsement of the 777 and a leading indicator of a healthy climate in the airline industry. So far, Boeing announced orders for 230 of its 777s.

“I think this is a real coup for the company …,” said William Whitlow, an analyst with Pacific Crest Securities in Seattle. “To have Singapore, which is a real trendsetter, give a blanket endorsement to the 777 family of airplanes will really help get that airplane established in the Far East.”

Boeing was favored in bidding against the Airbus 330. But airline officials had hinted only that the order would be for at least 33 medium-size, medium-range planes, providing little indication of just how big the order would be.

The company is currently in the midst of a 40-day-old strike by Machinists union members and admits that deliveries have been slowed somewhat by the labor unrest.

“You can’t have 30-thousand-plus workers off and not expect to see an impact on production,” said Boeing spokesman Russ Young.

Young also said it is too soon to say if the order will translate into additional jobs. While it’s a “terrific order and very good news … it’s impossible to speculate at this point,” he said.

The carrier’s firm orders of 34 777-200s are worth about $5.6 billion. Six of the firm orders and 10 of the options have been earmarked for Singapore’s leasing subsidiary.

The new planes, with about 300 seats, will be used mostly on busy Asian routes, where older Airbus 310s are too small for the growing traffic, Cheong said.

Boeing already has orders for 777s from Cathay Pacific, Thai Airways and Japan’s ANA.

Singapore Airlines will take deliv ery of the new planes between 1997 and 2004. One of the world’s most profitable carriers, it expects to finance the purchase mostly from its cash on hand.


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