Singapore Airlines (SIA) sparked a storm of controversy in late June with the surprise announcement that it was not only firming up options on 10 Boeing 777-200IGWs, but trading in its Airbus widebody fleet to do so.
While the 777 order was straightforward enough, SIA revealed that Boeing had agreed to buy 17 Airbus A340-300s, including two yet to be delivered.
While calling it an "operational and commercial decision", SIA claims the deal is not unusual, adding that "this is an option that's available". Airbus, however, disagrees, and industry observers have joined the European consortium in expressing shock at the deal. Calling it unprecedented, Airbus says it may affect future sales agreements with other carriers which may seek similar terms from both manufacturers.
Although manufacturers often agree to remarket aircraft for airlines or purchase aircraft outright, the observers say they usually only take older aircraft and generally fewer than they are putting in. Airbus senior vice-president for sales, John Leahy, says Boeing is looking to rekindle the price war that has raged between the two manufacturers, but this time using trade-ins rather than direct price-cutting to provide discounts.
Boeing denies the charge, insisting that the SIA deal will be profitable, claiming "a price war has no value". It also suggests the SIA deal is has precedents. This has drawn further ire from Airbus, which says: "Contrary to comments made by Boeing executives, the purchasing of competing products, especially aircraft which have not even yet been produced, is not usual practice and has never been undertaken by Airbus Industrie."
Source: Airline Business
