Singapore Airlines will operate five Boeing 777 freighters for DHL Express under a long-term deal to expand the express carrier’s intercontinental air network and meet high demand for express shipping between Asia and the U.S.
Under the outsourcing arrangement announced Thursday, DHL will provide the aircraft and Singapore Airlines will be responsible for the crew, maintenance and insurance. The planes will wear a dual white-and-gold livery similar to other DHL contract carriers such as Southern Air, Kalitta Air and Polar Air Cargo.
DHL (OTCUS: DPSGY) will transfer the first 777 to Singapore Airlines in July followed by another one in October. The remaining three aircraft are scheduled for delivery in 2023. Last week, the express delivery company placed an order with Boeing (NYSE: BA) for six additional 777 freighters. It has 15 of the twin-engine widebodies in its airline, with six more scheduled to be delivered from a previous order.
DHL officials said the new aircraft will support e-commerce growth in the trans-Pacific trade lane.
The planes will fly out of DHL’s South Asia hub at Changi Airport, picking up cargo in North Asia on the way to U.S. destinations. The initial service agreement is for more than four years, with an option to extend.
“This new agreement guarantees capacity on our critical routes out of Singapore as we gear up for ongoing growth in Asia-Pacific trade,” said Ken Lee, CEO of DHL Express Asia Pacific, in a news release. “It gives us greater flexibility to add new routes and optimize our aircraft utilization in the face of unpredictable changes or sudden increases in demand.”
Singapore Airlines Cargo operates seven Boeing 747-400 freighters in addition to utilizing space in Singapore and Scoot passenger aircraft. It has supplied air cargo services to DHL for many years, but the new deal takes the partnership to a new level. Singapore Airlines Cargo has indicated its intent to buy the all-new Airbus A350 large freighter when it is ready for production instead of Boeing’s next-generation plane, the 777-8.
DHL has steadily increased aircraft and suppliers for its in-house airline, which now totals 320 aircraft.
The 777 is popular as a long-haul, heavy-freight aircraft because of its capacity and lower fuel burn than four-engine aircraft.