Singapore Airlines contract shows top-end confidence

SINGAPORE Airlines (SA) is spending $17 billion (£11.1bn) on 30 Airbus and 30 Boeing aircraft, underscoring the airline’s bet on a pick-up in the struggling premium class market.

SA said it had agreed to order 30 additional Airbus A350-900 aircraft on top of 40 already ordered, potentially making it the largest customer for the main model of Europe’s newest passenger jet, which is due to make its maiden flight in coming weeks.

The Boeing order makes the carrier the first customer for a stretched version of the 787 Dreamliner.

The orders come as SA attempts a big strategy overhaul, pushing into the budget airlines segment and expanding its regional network.

“They demonstrate our commitment to the Singapore hub and our confidence in the future for premium full-service travel,” chief executive Goh Choon Phong said. “These aircraft orders are among the biggest in Singapore Airlines’ history, helping to ensure that we retain our industry leading position.”

This month, SA reported weaker-than-expected full-year results and warned of a deteriorating environment as it struggles to cope with the rapid emergence of Gulf carriers and low-cost Asian rivals such as Malaysia’s AirAsia and Indonesia’s Lion Air.

Boeing has been talking up the possibility of a stretched model of its newest passenger plane for more than a year. But the project took a back seat as Boeing grappled with a three-month grounding of the 787 fleet due to battery problems.