Monday, August 6, 2012

SIA

SIA: on Friday announced an order for 54 Boeing aircraft with a total list value of US$4.9b, its biggest single purchase in 6 yrs, for its regional unit SilkAir, a long time Airbus customer. The commitment comprises 23 single-aisle 737-800 planes and 31 737 MAX-8s, but the carrier has the option of switching to other variants of the aircraft if needed. The unit also has the option of increasing the order by 14 jets. The new planes will enlarge and update SilkAir's fleet, which comprises 21 A320 family Airbus aircraft. SIA is hoping regional carrier SilkAir and low-fare unit Scoot will help drive earnings growth, as Spore's flagship carrier faces stiff competition in its own premium market. SilkAir will begin receiving the 737-800 single-aisle jets in 2014, with deliveries continuing into 2021. S&P Equity Research says the 737 is an efficient aircraft, and having such planes in its fleet will help SilkAir compete against its main rivals, Indonesian carriers Garuda Indonesia (GIAA.JK) and Lion Air, which also use 737s.

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