Singapore Air gives boost to new Boeing jet in bid to cut costs

Singapore Airlines Ltd. is converting some of its Boeing Co. jetliner orders to the larger 777X, giving a boost to the coming model as part of an agreement to slow deliveries from the U.S. planemaker.

The airline will pare back commitments for the Boeing 787-10 Dreamliner by 14 planes, while adding 11 777-9s to its existing order, according to a statement Thursday. The change brings Singapore Airlines’ total orders to 31 for the so-called 777X, which hasn’t made its debut.

The move, combined with an earlier agreement to defer Airbus SE deliveries, will delay more than S$4 billion ($3 billion) in capital spending, Singapore Airlines said. The carrier has been hit especially hard by Covid-19 travel restrictions because there’s no domestic market to rely upon in the city-state.

With the latest agreement, Singapore Airlines’ expenditure on aircraft will fall every year until March 2024. For the year ending in March, its spending will drop to S$2.8 billion from S$5 billion. The carrier didn’t provide further detail on delivery timing by aircraft type.

The added 777X orders—the first since well before the coronavirus pandemic—are a shot in the arm for the beleaguered wide-body. The aircraft has suffered multiple delays in its entry into service, leading Boeing to take a $6.5 billion charge in 2020. The planemaker said about a third of the jet’s order haul was at risk because the latest setback.

Chicago-based Boeing had no immediate comment outside of U.S. business hours. An Airbus spokesman declined to comment on customer fleet planning and strategy.

Pandemic’s Impact

Carriers around the world are pushing back aircraft deliveries after the pandemic destroyed travel demand and saw thousands of planes grounded.

The blow has been hardest on aircraft built to cruise across oceans. Orders for wide-body jets such as the 777X, Boeing’s 787 Dreamliner and competing Airbus models are expected to be the last to recover from the slump.

Singapore Air has 15 A350-900s still to be delivered from Toulouse, France-based Airbus.

The carrier said in November that it had concluded negotiations with Airbus on a revised fleet delivery schedule “incorporating deferrals for part of the aircraft on order.”