SIA-Boeing deal a 'win-win' for both sides

US President Donald Trump, Prime Minister Lee Hsien Loong and (from left) Mr Lau Hwa Peng, SIA senior vice-president, engineering, and SIA chairman Peter Seah witnessed the signing of the agreement between SIA CEO Goh Choon Phong (seated) and Boeing
US President Donald Trump, Prime Minister Lee Hsien Loong and (from left) Mr Lau Hwa Peng, SIA senior vice-president, engineering, and SIA chairman Peter Seah witnessed the signing of the agreement between SIA CEO Goh Choon Phong (seated) and Boeing Commercial Airplanes CEO and president Kevin McAllister at the White House on Monday. SIA will buy 20 Boeing 777-9s and 19 787-10 Dreamliners over the next decade under the deal.ST PHOTO: SEAH KWANG PENG

WASHINGTON • Singapore Airlines (SIA) has signed a deal with American aircraft manufacturer Boeing to buy 39 aeroplanes worth almost US$14 billion (S$19 billion).

The signing ceremony at the White House's Roosevelt Room on Monday was witnessed by Prime Minister Lee Hsien Loong, who is on an official working visit to the United States, and President Donald Trump, who said the deal would create some 70,000 American jobs.

Boeing said the transaction will sustain thousands of US suppliers as well as 70,000 direct and indirect US jobs during the delivery period of the contract.

PM Lee later said: "It is a win-win for both sides. It will further modernise SIA's fleet and will also support many American jobs."

Under the deal, SIA will buy 20 Boeing 777-9s and 19 787-10 Dreamliners over the next decade.

SIA chief executive officer Goh Choon Phong and Boeing Commercial Airplanes CEO and president Kevin McAllister signed the agreement, with SIA chairman Peter Seah present.

 

Mr Goh said the major order would enable the airline to continue operating a modern and fuel-efficient fleet. "These new aircraft will also provide the SIA Group with new growth opportunities, allowing us to expand our network and offer even more travel options for our customers," he added.

The 777-9s, intended mainly for long-haul routes, are due for delivery from the 2021/22 financial year, while the 787-10s, for medium-range routes, are due from the 2020/21 financial year.

SIA's first 787-10, from a previous order in 2013 for 30 aircraft, is due to be delivered in the first half of next year.

"We are thrilled to finalise their purchase," said Mr McAllister, adding that Boeing and SIA have been strong partners since the airline's first operations 70 years ago

The deal was highlighted as a demonstration of the strong commercial ties between both countries, at a working lunch attended by PM Lee and Mr Trump, Vice-President Mike Pence, as well as Foreign Minister Vivian Balakrishnan, Minister for Trade and Industry (Industry) S. Iswaran and Second Minister for Defence Ong Ye Kung. Also at the lunch were US Trade Representative Robert Lighthizer, National Security Adviser H.R. McMaster, Undersecretary of State Thomas Shannon and senior adviser to the President Jared Kushner.

Mr Trump told the press later: "I want to thank the Singaporean people for their faith in the American engineering and American workers. And our American workers deliver the best product, by far."

Describing Singapore as a magnet for business, he added: "Today, over 4,000 American companies are operating in Singapore, and we have a very large trading relationship with Singapore."

PM Lee said the US is an important economic partner for many countries in Asia, just as countries in the region are important economic partners for the US.

"Singapore is a small country - we are just 5.5 million - but we have sizeable investments and trade with the US, which continue to grow," he added.

Singapore is the second-largest Asian investor in the US, with over US$70 billion in stock investments. Total trade in goods and services between both countries amounted to more than US$68 billion last year.

The US has also consistently run a trade surplus with Singapore, which stood at over US$18 billion last year, and America exported US$43 billion of goods and services to Singapore in the same period.

PM Lee said Singapore must be one of the "highest buying American customers in the world" on a per capita basis, with each person consuming on average about US$7,500 worth of American goods and services yearly.

He listed iPhones, pharmaceutical products, tyres, financial and consultancy services and golf clubs, and said to laughter: "I mean the sticks, not the associations."

Mr Trump is an avid golfer who owns several clubs.

PM Lee said he also discovered recently that his New Balance sports shoes - "which are very good" - are made in the US, probably in New England.

Zakir Hussain

A version of this article appeared in the print edition of The Straits Times on October 25, 2017, with the headline 'SIA-Boeing deal a 'win-win' for both sides'. Print Edition | Subscribe