SINGAPORE AIRLINES ANNOUNCES US$ 8.6 BILLION AIRBUS A3XX ORDER

Singapore Airlines (SIA) announced today an US$8.6 billion order for 25 super-jumbo A3XX very large aircraft (VLA). The price tag includes the cost of spares and installed engines (but not spare engines).

The prices are applicable at the time of aircraft delivery, between early 2006 and 2011, with price escalation factors incorporated.

Ten of the aircraft are firm orders, the rest options. The 15 options can be exercised for freighters as well as passenger aircraft.

The very large aircraft (VLA) with over 500 seats will be the largest passenger aircraft ever produced. With the first delivery scheduled for early 2006, SIA will be the first airline in the world to accept and operate this revolutionary aircraft. (SIA was also the first airline, together with a US airline, to operate the Boeing 747-400).

A decision on the engine type will be made by the end of October.

Said Dr Cheong Choong Kong, SIA’s Deputy Chairman and Chief Executive Officer: “Our decision to be a pioneer for this latest aircraft type is further evidence of SIA’s determination to stay ahead of the field in product and service. The A3XX is the latest in aircraft technology.”

The decision was the culmination of a keenly contested competition between the A3XX and the B747X, Boeing’s version of the VLA. According to Dr Cheong, “We conducted the usual meticulous evaluation; first, of whether we needed a VLA, and then of the comparative merits of the candidates. An important reason for the choice of the A3XX was its new technology. Economic factors were also important.”

The A3XX has a range of 7,500 nautical miles, in SIA’s configuration. SIA intends to deploy it on its high-density routes to London, Los Angeles, San Francisco, New York, Tokyo, Hong Kong and Sydney.

The A3XX routes to the USA will entail an intermediate point. They will complement the non-stop services that SIA plans to operate to US points in 2002 with the super-long-range Airbus A340-500.

Mr. Michael Tan, SIA Executive Vice-President (Commercial), said: “Although the first delivery is 5 years away, we can hardly wait. The larger cabin interior offers intriguing opportunities. We don’t wish to give anything away at this stage, but our customers can expect service innovations and unprecedented levels of comfort. Improving on what we are already offering our passengers will require creativity and a good deal of research, but it is a necessary and worthwhile effort.”

The Airline’s interest in a VLA of over 500 seats has been common knowledge. Such an aircraft will relieve congestion in airspace and at airports, allowing the carriage of a larger number of passengers at the same frequency, which is good for the environment. “A larger aircraft also means a lower operating cost per seat,” said Dr Cheong, “especially with the higher efficiency that comes with newer technology. This confers a competitive advantage to the operator, enabling it to earn higher profits with the same or even more attractive fares. ”

SIA currently operates a fleet of 92 aircraft, with a further 39 on firm order and 33 on option. It operates 44 B747-400s (of which eight are freighters), 18 Boeing 777s, 15 Airbus A340-300s, and 15 A310-300s. The average age of the aircraft in SIA’s passenger fleet currently is 5 years 7 months, making it one of the aviation world’s youngest.