Newsstand - Singapore Airlines evaluating proposals from Boeing, Airbus

http://www.marketwatch.com/news/story.asp?siteid=google&guid=%7B8451FCFB-C952-497E-B0D1-C7D958CE41F8%7D&keyword=

SINGAPORE (MarketWatch) -- Singapore Airlines Ltd. (S55.SG) is evaluating proposals from Boeing Co. (BA) and Airbus (ABI.YY) to supply long range aircraft, but a decision is unlikely anytime soon, a senior airline executive said Monday.

I tend to think Boeing has this one in the bag.

SQ already operates the 777-200ER and 777-300ER, so adding the 777-200LR to replace the A340-500 increases capacity, which will offset the higher acquisition costs.

The 787-9 or 787-10 makes the most sense for SQ is they want to replace their 777-200ERs, since it will offer similar cockpits and the advantage of being able to "easily" swap the engines between GE and RR - important to SQ since they tend to get rid of planes after only a decade or so, and this will help resale value and desire.

The 747-8 might also be in the cards, both passenger and freighter. SQ Cargo internal sources say they are interested in the 747-8F, and the 747-8 Intercontinental passenger variant can fly SFO-HKG year-round with a full load, which neither the A380 nor the 747-400 currently can (and the A380 seems to be able to do it even less then the 744, according to SQ's models).

Okay, I'll ask my question on this subject: why would SQ, who is the launch partner for the A380, go back to Boeing for future orders? Wouldn't it make more sense to build a fleet either on one manufacturer or the other given the commonalities in maintenance, parts, etc within one brand? I can imagine a widget on an A380 couldn't be swapped for one on a A340, for example, but wouldn't there still be some economies of scale using only one supplier?

Okay, I'll ask my question on this subject: why would SQ, who is the launch partner for the A380, go back to Boeing for future orders? Wouldn't it make more sense to build a fleet either on one manufacturer or the other given the commonalities in maintenance, parts, etc within one brand? I can imagine a widget on an A380 couldn't be swapped for one on a A340, for example, but wouldn't there still be some economies of scale using only one supplier?
There are countervailing considerations - such as better economics with the 777s.

Okay, I'll ask my question on this subject: why would SQ, who is the launch partner for the A380, go back to Boeing for future orders Wouldn't it make more sense to build a fleet either on one manufacturer or the other given the commonalities in maintenance, parts, etc within one brand?

SQ's fleet is predominately Boeing, so if they were to standardize on one or the other, Boeing has the edge in terms of frames in place.

The A380-800 is unique in her category, yet SQ is disappointed that they cannot fly it SFO-HKG as they had hoped, and now must fly it SYD-SIN-LHR against QF and VS while relying on 744s and 773ERs (and, perhaps, 747-8Is) to continue the SFO-HKG service. To my knowledge, SQ has already cancelled/let lapse her 15 options, so she will only be taking 10 units for now.

Also, the A340-500's inability to carry a First Class cabin and the requirement for a boutique passenger configuration to allow sufficient cargo lift is somewhat of a sore point, which the 777-200LR will address.

Yes, SQ could replace their 777-200ERs with A350-900s, but the 777-200LR would offer them more capacity on the same stage length as the 777-200ER and A340-500, as well as the ability to service longer stage lengths then the A350-900 and A340-500.

There are countervailing considerations - such as better economics with the 777s.

As in lower costs for the planes or better fuel economy? Or both?

Thanks for the tutorial. :)

Singapore Airlines (SIA) aims to place an order for Airbus A350s or Boeing 787s next month and is considering leasing Airbus A330s or acquiring further Boeing 777s as an interim solution.

The Star Alliance carrier initially sought 2008 delivery slots for 787s, but SIA chief executive Chew Choon Seng says first deliveries, for either the A350 or 787, will be in 2010 or 2011. He says SIA will decide on an order – previously expected earlier this year – as early as its board meeting in early May.

SIA had wanted first deliveries in 2008, but all the early delivery slots for 787s have been snapped up by other airlines.

If SIA selects A350s, Airbus “has offered A330s on a lease basis” as an interim solution until the A350s are delivered, he adds. Chew says if SIA orders 787s, it will also order more 777s, but rather than phasing them out later, it would use them to replace its older 747-400s.

Chew is adamant the carrier has not decided on which widebody to order and says any decision will have to wait until its next board meeting in early May.

SIA may choose between A350s or 787s in early May, but the board meeting could also see the carrier decide whether to order ultra-long-range and large-capacity aircraft.

http://www.flightglobal.com/Articles/2006/04/11/Navigation/177/205866/SIA+slips+widebody+plan.html

SIA had wanted first deliveries in 2008, but all the early delivery slots for 787s have been snapped up by other airlines.
Hmm... interesting. I wonder if the much rumored 787 production increase would change that enough that they wouldn't have to go with an interim solution? I have to imagine that if a production increase is in the cards any time soon, it'd have to be in play on this bid.

Hmm... interesting. I wonder if the much rumored 787 production increase would change that enough that they wouldn't have to go with an interim solution? I have to imagine that if a production increase is in the cards any time soon, it'd have to be in play on this bid.

Well it does show that SQ wants 787-8s and/or 787-3s, since those are the only two models available before 2011. If they wanted only 787-9s and 787-10s, then the delay to 2011 or 2012 wouldn't be an issue.

Only the A358 model is available before 2011, as well, so...

Evidently there are no A330s available for lease, so SQ has to wait for new-builds to come down the line. With the current A330 backlog, I am not sure when Airbus could offer A330s and if it is around 2008 or 2009, that means only a handful of years before they'd be replaced with A358s...

Once again the problems with delivery slots, pointed out earlier, are harming Boeing.

Also pointed out earlier, many companies may not order any aircraft for the time period Boeing is able to deliver the 787 and Airbus is not really able to offer the A 350 much earlier...

Why should anybody buy aircraft at record price levels for a time period projected to be in another recession ?

Why shouldn´t they wait some more months or even years ? Fear of not getting any in time could be a reason though...

As pointed out by sea_tigger, no A 330`s available at the moment, the only longhaul aircraft available are about two dozen 747-400 ( the UAL ones carried a $ 15 million $ conversion tag when TG thought about it ) and about 6 dozen 767, hardly an alternative for SQ as well...

LH could need A 330, LX needs two-three more, but Airbus is indeed not able to offer a few early next week to SQ...

Once again the problems with delivery slots, pointed out earlier, are harming Boeing.

Perhaps. But if SQ wanted 787s, they could have placed refundable deposit slots down like QR did.

I imagine if slots are a critical issue, Boeing can find some. Primaris is probably a "dead" order, so that's four (?), and I am sure NW would be more then happy to defer their 787s for a few extra million to help em through C11. :)

Perhaps. But if SQ wanted 787s, they could have placed refundable deposit slots down like QR did.

I imagine if slots are a critical issue, Boeing can find some. Primaris is probably a "dead" order, so that's four (?), and I am sure NW would be more then happy to defer their 787s for a few extra million to help em through C11. :)

i dun think SQ has any problem with slot delivery but they have had run-ins with Airbus over their A240-300 aircraft and so on. They were a bit unhappy about performance issues with the A345 and the long delay in the A380... Like most singapore companies, they tend to keep it confidential until the end.

I imagine if slots are a critical issue, Boeing can find some. Primaris is probably a "dead" order, so that's four (?), and I am sure NW would be more then happy to defer their 787s for a few extra million to help em through C11. :)

If NW is clever, they sell their slots for the 787 , cash in quite some $$ and order A 350. By all means, how stupid was the decision to buy 8 787 when you have 150 A 320/330 family planes flying, some for more than 15 years...

Even if they need the planes for two or three routes ( JFK-NRT was always rumoured ) it does not make sense at all to buy such a small sub fleet, if you could utilise huge synergies because you already have so many A 320/330...

i dun think SQ has any problem with slot delivery but they have had run-ins with Airbus over their A240-300 aircraft and so on. They were a bit unhappy about performance issues with the A345 and the long delay in the A380... Like most singapore companies, they tend to keep it confidential until the end.

The only 240 I know, was a Volvo and indeed it had some performance issues.

However you are right, nobody needed the A 345 and the schedule for the A 380 is months beyond the original plan.

Some additional information:

SQ wants the 787-9 only, so slots are not a deal-breaker/deal-maker as that plane will not EIS until 2011. If SQ could get the 787-9 in 2008-2011, they'd buy it now, but since they can't, the A358 is now an option.
SQ needs more capacity between 2008 and 2011 (when the 787-9 and A358 become available). That is why they are asking for A330s or 77Ws.