Monday , July 16 2018

Airbus, Boeing win $3.1bn order from Singapore Air-Tata venture

Bloomberg

Airbus SE and Boeing Co. split firm orders for 19 jets from the Indian affiliate of Singapore Airlines Ltd. that is seeking to start international flights and bolster local operations.
Vistara, as the airline is known, will buy 13 of the A320neo and A321neo jets that have a list price starting at about $111 million each and six Boeing 787-9 Dreamliners at about $282 million apiece. The combined order is valued at $3.1 billion, excluding customary discounts, the carrier said.
“This order is very important for Vistara because we always felt that international operations will give us a leverage on further improving our financial performance,” Chief Executive Officer Leslie Thng said in an interview separately. As a full-service model in an “extensively competitive” local market, Vistara is not yet profitable, he said.
Offering premium services in three classes, the airline operates in one of the world’s most expensive aviation markets, where intense competition means fares can be as low as
2 cents despite jet fuel being the costliest in Asia. Still, the allure of the nation of 1.2 billion people has prompted Singapore Air, Etihad Airways PJSC and AirAsia Bhd. to seek local partners and compete against the likes of budget airlines such as IndiGo and SpiceJet Ltd.

Leasing More
Additionally, Vistara will be renting 37 new A320neo family aircraft from leasing companies, according to its statement. The airline currently has a fleet of 21 single-aisle Airbus planes.
Vistara, Jet Airways India Ltd. and Go Air are among Indian carriers boosting orders from Asia as regional operators add routes and swell their fleets to meet travel demand fuelled by people flying for the first time. Guillaume Faury, the head of commercial aircraft at Airbus, has said reducing the order backlog of more than 7,100 planes is among the biggest challenges for the European maker as production fails to keep pace.
In late June, Chicago-based Boeing won two orders worth $14.4 billion. Bamboo Airways, a Vietnamese startup, signed a commitment for 20 of its twin-aisle 787-9 Dreamliners, while Vistara’s rival Jet Airways announced it was buying 75 single-aisle 737 Max jets.
The latest narrow-body A320neo family jets ordered by Vistara will be powered by Leap 1-A engines made by CFM International and will be delivered between 2019 and 2023. The bigger Boeing jets would be handed over in 2020 and 2021, the airline said. The Dreamliners will have General Electric Co.’s GEnx-1B turbines.
Tata and Singapore Airlines will fund the latest plane purchase by Vistara, CEO Thng said.

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