Singapore Airlines Ltd., Asia's most valuable flag-carrier, said Wednesday it had ordered up to 31 long-range Boeing 777-300 jetliners as it expands its fleet but was for now spurning the U.S. planemaker's new Dreamliner 7E7.
The contract win is likely to be regarded as a big plus for the Boeing Co. in its never-ending dogfight with European rival Airbus. But the setback for the Dreamliner will likely rankle, as Boeing's commercial future is heavily reliant on the new model's success.
Aircraft orders from state-linked Singapore Airlines are highly prized by plane manufacturers because, analysts say, the company's purchasing decisions can act as a guideline for other carriers. The company has one of the youngest fleets worldwide.
Singapore Airlines said in a statement that it had placed a firm order for 18 Boeing 777-300s, which will be delivered between 2006 and 2010 to help it expand its fleet. The company has taken options on 13 more 777s. The total value of the deal could be as high as $7.35 billion in list prices with spare parts and engines, but airlines typically negotiate a significant discount.
The twin-engine B777-300ER (extended range) can seat about 350 passengers and can cover 7,000 nautical miles. Singapore Airlines said it would use them on its long-haul and medium-haul routes. The 7E7 seats 230.
The order would enable the carrier to expand its combined passenger and cargo capacity by between 4 percent and 6 percent a year.
General Electric Co. GE90-115B engines will be used on the new planes.
Singapore Airlines chief executive Chew Choon Seng said Chicago-based Boeing and Airbus had competed fiercely for the order.
The new Boeings "should integrate well with our existing fleet, which already includes fifty-five aircraft from the B777 family," Chew said in a statement.
But Singapore Airlines said it had also asked manufacturers to pitch aircraft suitable for its regional routes, and Boeing offered the 7E7 for evaluation against Airbus's A330-200.
Neither prevailed as "the proposals submitted did not meet (Singapore Airlines') financial criteria," the company said without elaborating. For now, the airline will continue to use its existing B777-200s on regional routes.
Boeing's 7E7s are scheduled to enter service in 2008. The planemaker says the new model -- its first all-new design in a decade -- is more efficient than existing, rival planes.
After years of weighing up the project, it formally launched the 7E7 program in April with a 50-plane order from Japan's All Nippon Airways Co.
Last month, Boeing said it had proposals for 7E7 orders out to more than 30 airlines.
Singapore Airlines currently operates 89 wide-bodied aircraft and already has an additional 14 firm orders outstanding, including four for Boeing 777 jets.
Boeing shares gained $1.59, or 3.1 percent, to close at $52.50 on the New York Stock Exchange.