SINGAPORE: Singapore's SilkAir on Friday decided to take on Boeing as a customer, leaving planemaker Airbus reeling in a move that has increased tensions between the two leading airplane manufacturers. Airbus has accused Boeing of aggressive tactics as a jet price war continues to increase. Silkair, the regional arm of Singapore Airlines, said in a statement that it had placed the largest order in its history with a tentative deal to buy over 50 Boeing 737 jets worth $5 billion. This came as figures showed Boeing outselling Airbus by more than two to one in the first 7 months of the year, reversing a deficit from the previous year when Airbus broke industry records with a fuel-saving version of its competing A320 jet. The world's leading planemakers have been engaged in a battle for market shares since late 2011, slashing prices to take maximum advantage of the chance to lock in customers for the A320neo and Boeing's response, the 737 MAX. “They are in a huge market share war between the MAX and the neo, and I think that's going to be reflected in price,” said Alex Hamilton, director of research with EarlyBirdCapital, said in comments published by Reuters news agency. The 150-seat medium-haul jets are the “bread and butter of low-cost airlines and feed the hubs of large network carriers, with potential sales of $2 trillion over the next 20 years,” Reuters said. SilkAir revealed it had agreed to buy 23 Boeing 737-800 aircraft, Boeing's current benchmark model, and 31 of the upgraded versions called 737 MAX 8, plus options for more. The A320neo and 737 MAX offer fuel savings of roughly 15 percent together with other improvements, sparking a rush of demand from airlines seeking to ease their highest cost in an industry that suffers from chronically slim profit margins. The airline did not disclose the price of the deal, but carriers typically receive hefty discounts, sometimes bringing total concessions to greater than 50 percent of list prices, according to analysts and estimates derived from leasing data.
