Singapore Airlines has agreed to buy 39 Boeing aircraft in a show of confidence in a better future, even as the carrier battles current challenges.
The new planes, valued at US$13.8 billion (S$19.5 billion) - based on catalogue prices - will support additional growth and fleet modernisation through the next decade, SIA said in an announcement after trading hours yesterday.
The impending order for 20 B777-9s and 19 B787s comes with an option for 12 more aircraft. Delivery will start from 2020.
When the actual deal is inked, it will be SIA's biggest aircraft order since May 2013, when it announced a US$17 billion order for 60 aircraft.
"Today's major order for wide-body aircraft enables us to continue operating a modern and fuel-efficient fleet, providing the SIA Group with additional expansion opportunities to ensure that we retain our industry-leading position," said chief executive Goh Choon Phong.
Apart from investing for the future, the order demonstrates SIA's commitment to further grow the Singapore hub, as SIA will be able to offer even more travel options for customers, said Mr Goh.
SIA works closely with Changi Airport Group to offer convenient flight timings and minimal waiting times, to encourage more travellers to break their flights in Singapore.
Its budget arms Scoot and Tigerair also cooperate closely to provide similar options.
SIA's aircraft commitment to Boeing is an important win for the American firm, which competes aggressively with its European rival Airbus for plane orders.
In addition to 30 previously-ordered B787-10s, SIA has outstanding orders with Airbus for five A380-800s and 57 A350-900s.
Regional arm SilkAir has outstanding orders with Boeing for 37 single-aisle B737 MAX 8s. Long-haul budget carrier Scoot has orders with Boeing for eight B787s. Tigerair, which operates short-haul budget flights, has bought 39 A320neos.
SIA's announcement comes two days after it reported a 35.6 per cent drop in year-on-year profits for the three months from October to December, although operating profits increased by 1.7 per cent.
StrategicAero Research chief consultant Saj Ahmad said many of the new planes will likely replace the airline's ageing A330 and A380 fleets as well of some of its early B777-30ERs.
"The challenge for SIA, however, remains the same - driving up yields with fuller cabins amidst a backdrop of fare depression and possibly rising fuel bills as oil continues to spike northward," he said.