The swap highlights the lengths taken by major airplane manufacturers to meet demand in an Asian market anticipated to post a booming long-term recovery from the pandemic. Meanwhile, Boeing displayed a prototype of its state-of-the-art widebody 777X jet in Asia for the first time at the Singapore Air Show.
Airbus and Singapore Airlines sealed their agreement at a signing ceremony held during the expo in mid-February. The carrier will replace a fleet of aging Boeing air freighters averaging 18 years of service. The A350F offers improved operating and fuel efficiency.
Singapore Airlines is the first major airline operator to purchase the A350F from Airbus. The European manufacturer previously sold the model to a leasing company.
The 17 passenger planes in the original contract totalled an aggregate cost of US$2.3 billion, according to a report by Reuters, which used prices listed in 2018. The order for the cargo jets is estimated to be worth about the same value.
The two sides entered into a preliminary agreement in December last year. The final deal includes options to buy five additional A350Fs. Airbus will begin delivering the aircraft in October 2025.
“It is a huge endorsement for us,” said Christian Scherer, Airbus’s chief commercial officer. “We expect to see at least 100 or so new freighters in (the widebody) category going into the Asia-Pacific region. I believe this is a conservative number.”
Scherer said Airbus foresees the model creating strong demand in the region for the next 20 years.
Despite the fallout from the pandemic, the Asia-Pacific region is expected to drive the global market in the coming decades.
Demand in the region will total 17,600 aircraft by 2040, according to Airbus’s estimates, accounting for 45% of the worldwide total. During the same period, passenger traffic will rise by 5.3% a year, exceeding the global growth rate of 3.9%, Airbus data showed.
Boeing intends to capture that demand with its 777X jet.
Although the 777X did not land any orders during the expo, Vietnamese low-cost carrier Bamboo Airways disclosed that it “expressed interest” in purchasing the aircraft during discussions with Boeing.
Bamboo ordered 12 of the 777X in February 2020, according to news reports at the time. But the onset of the pandemic forced the airline to shelve those plans.
Demand exists for wide-bodied passenger planes in the Asia-Pacific region, said Stan Deal, CEO of Boeing’s commercial airplane unit. Deal expressed a desire to ramp up business talks.
Asian passenger airlines have been slower to recover than their Western counterparts, as many governments in the region kept travel tightly restricted. Asia-Pacific demand for international flights plunged 93.2% in 2020, compared with about 70% elsewhere, according to the International Air Transport Association.
But a growing number of countries have begun allowing quarantine-free entry for vaccinated travellers.
Nonetheless, Asia-Pacific air travel remains “a bit behind because of the fragmentation [of the Covid-19 situation],” Scherer said. “But signs of recovery are sure enough.”
As travel restrictions are further eased, “air transportation will be back,” he said, adding that the “centre of gravity is moving back to Asia.”
Said Boeing’s Deal: “It will be a matter of time [before a full recovery arrives]. We already see engagement in discussion with customers in this region. It will be more narrow-body focused initially.”