updated 8/25/2004 1:00:39 PM ET 2004-08-25T17:00:39

Singapore Airlines, Asia’s most valuable flag-carrier, said Wednesday it had ordered up to 31 long-range Boeing 777-300 jetliners as it expands its fleet, but was for now spurning the U.S. planemaker’s new Dreamliner 7E7.

The contract win is likely to be regarded as a big plus for Boeing in its never-ending dogfight with European rival Airbus. But the setback for the Dreamliner will likely rankle as Boeing’s commercial future is heavily reliant on the new model’s success.

Aircraft orders from state-linked Singapore Airlines are highly prized by plane manufacturers as analysts say the company’s purchasing decisions can act as a guideline for other carriers. The company has one of the youngest fleets worldwide.

In a statement to the local stock exchange, Singapore Airlines said it had placed a firm order for 18 Boeing 777-300s, which will be delivered between 2006 and 2010 to help it expand its fleet.

The company has taken options on 13 more 777s in deal valued at $7.35 billion in list prices if the cost of spares and spare engines is included. Airlines typically negotiate steep discounts, however.

The twin-engined B777-300ER — which stands for extended range — can seat about 350 passengers, and can cover 7,000 nautical miles. Singapore Airlines said it would use them on its long-haul and medium-haul routes.

The order would enable the carrier to expand its combined passenger and cargo capacity by between 4 percent and 6 percent a year.

General Electric GE90-115B engines will be used on the new planes.

Fierce competition
Singapore Airlines Chief Executive Officer Chew Choon Seng said Chicago-based Boeing and Airbus had competed fiercely for that deal.

The new Boeings “should integrate well with our existing fleet, which already includes fifty-five aircraft from the B777 family,” Chew said in the statement.

But Singapore Airlines said it had also asked manufacturers to pitch aircraft suitable for its regional routes, and Boeing offered the 7E7 for evaluation against Airbus’ A330-200.

Neither prevailed as “the proposals submitted did not meet (Singapore Airlines’) financial criteria,” the company said without elaborating. For now, the airline will continue to use its existing B777-200s on regional routes.

Boeing’s 230-passenger 7E7s are scheduled to enter service in 2008. The planemaker says the new model — its first all-new plane in a decade — is more efficient than existing, rival planes.

After years of weighing up the project, it formally launched the 7E7 program in April with a 50-plane order from Japan’s All Nippon Airways.

Last month, Boeing said it had proposals for 7E7 orders out to more than 30 airlines.

Singapore Airlines currently operates 89 wide-bodied aircraft, and already has an additional 14 firm orders outstanding, including four for Boeing 777 jets.

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