SINGAPORE : National carrier Singapore Airlines (SIA) on Wednesday (Feb 16) confirmed its order of seven Airbus A350 freight planes for an undisclosed sum, saying that they have been chosen to replace its existing Boeing freighters because of their lower carbon emissions.

The order, first mentioned in December last year, will make SIA the first carrier to operate this new generation widebody freight plane when deliveries begin in the fourth quarter of 2025.

It comes as airfreight in the region is at an all time high, powered by increasing e-commerce, vaccine and medical equipment transportation, as well as record high shipping costs amid the pandemic.

The agreement signed on Wednesday has an option for the purchase of five more aircraft, which SIA's chief executive officer Goh Choon Phong said the airline will activate if market conditions demand it.

For now, SIA is using the newly ordered planes to replace its seven Boeing 747-400F freighters, and its freight capacity remains largely unchanged.

"For passenger numbers, you can talk about projections, advance bookings for the next three months, but for cargo, we basically look just one week in advance, because it's so dynamic," Goh said.

"Of course, if the market demands it, we could slow down some of the retirement of the older freighters. Whether we take the option (for five more Airbus aircraft) will depend on the situation when we assess the landscape."

The Airbus A350 burns up to 40 per cent less fuel on similar missions than Boeing's 747-400F, reducing SIA's carbon emissions by around 400,000 tonnes annually.

But its maximum payload of 109 tonnes is slightly lower than Boeing's 116 tonnes.

Goh said SIA had been searching for an alternative to its ageing Boeings for some time, and worked with operators to develop a suitable new aircraft for its purposes. The new Airbus is not only more fuel-efficient, but can be more easily deployed onto alternative routes.

He said: "We have always been quite proactive in working with our partners - even before the aircraft is available - to share our view about what we think the market will require, and what is useful to the industry.

"This plane, importantly, will give us even greater flexibility in our deployment because it is more capable in terms of range."

The Airbus has a range of 4,700 nautical miles, greater that Boeing's by 200 nautical miles.

SIA's deal with Airbus involved converting its orders for 17 passenger planes - 15 A320neo and two A350-900 - with Airbus to go some way towards reducing costs.

Separately, SIA also ordered another 22 engines to power its fleet of Boeing 777-9 passenger aircraft from GE Aviation on Wednesday at a cost of S$ 3.7 billion.

This brings its order of the GE9X engines to 62, up from the initial order of 40 made in 2017. The engines will be compatible with any approved sustainable aviation fuel.

Airlines globally have been adding to their inventories as airfreight levels surge and passenger numbers rebound from the Covid-19 pandemic.

South-East Asia especially has been cited by companies as a particularly dynamic region, with its dense intra-regional flights pre-pandemic and a growing middle class.

At a briefing at the Singapore Airshow on Wednesday, Boeing said South-east Asia will need another 4,400 airplanes in the next 20 years, and its overall fleet will more than double.

Intra-South-east Asian flights post-pandemic should grow at a rate of 6.7 per cent, higher than the global average of 4 per cent, emerging as the fifth largest market in the world in the near future.

As of January, global passenger traffic is at 55 per cent of pre-pandemic levels, up from the 28 per cent at end-2020.

 - ANN