THE BOEING VS. AIRBUS BATTLE IS THE heavyweight championship of the international business world. National prestige, tens of millions of dollars, and hundreds of jobs ride on each hard-fought commercial-airline order. Long-time champ Boeing is America's top exporter with 50% of the world market for large commercial jetliners. But Europe's perennial challenger, Airbus Industrie, has lately grabbed a 30% global market share, and crows that in 1994 it edged out its archrival for new airplane orders. Last week, though, the American planemaker struck back with a haymaker: a $12.7 billion order for 77 of its brand-new, twin-engine 777-200s, the biggest single widebody-jetliner purchase in history.

"This was a pivotal deal," said Larry Dickenson, Boeing's chief Asia salesman. The purchase was a major vote of confidence in the 300-seat 777, which was certified for service only last June. Moreover, the order came from one of the most demanding customers in the business, Singapore International Airlines, which could sway the buying decisions of other carriers in the lucrative Asian market. To the surprise of some analysts, SIA did not split the hotly contested deal between the two manufacturers, as it did last year with a $10.3 billion order for 52 planes. Exulted Dickenson: "We believed we had a great airplane. With Singapore's order, we know we have a great airplane."

At Airbus headquarters in Toulouse, France, officials took the defeat stoically. "It was the company's choice, and we respect it," said a spokeswoman. Airbus, a consortium of French, German, British and Spanish aerospace companies, had challenged the new 777 with its twin-engined A330. Part of the sales pitch was that SIA could save $1 million a year in training and maintenance costs since the A330 would complement the long-haul A340 planes already in SIA hangars. Airbus' claims that it will be the future champion were already sounding a bit hollow: its new orders this year lag Boeing's, 251 to 83.

Singapore Airlines' announcement marked the end of a fervid eight-month courtship by the transatlantic rivals. SIA, known as a blue-chip carrier for business travelers, launched the bidding with a detailed 30-page tender offer. Boeing's salesmen kept in constant touch, visiting the island republic at least once a month to advise officials of developments in the 777, which Boeing's Dickenson called "probably the last new airplane to be produced this century." The 777 is the company's first commercial craft with computer-controlled "fly-by-wire" technology, long an Airbus feature.

With the plane-manufacturing business in a sharp nose-dive because of erratic passenger growth and cutthroat fare competition that has wiped out airline profits, the 777 represents one of Boeing's biggest risks since the behemoth 747 was launched. Analysts put the 777 development costs at more than $6 billion, and the company calls it "the world's most expensive privately funded commercial venture." One of the aircraft's chief selling points turned out to be its huge, comfortable cabin, with 2 m of standing room under the overhead luggage bins.

Both parties denied that international politics played any role in the choice, but industry observers would not be surprised if some discreet governmental lobbying occurred. "The economic and employment stakes are so enormous that just about anything is allowed," noted Bertrand d'Yvoire, head of Consultair, a Paris consulting firm.

Boeing predicts that by 2004 Asia will account for a third of world air travel, up from 22% today. By then, SIA expects its current fleet of 69 aircraft to grow to 150.

And by then, Boeing may be a lot bigger too. Last week there were reports that the huge firm (1994 sales: $21.92 billion) was discussing a possible merger with American competitor McDonnell Douglas, creating a superjumbo powerhouse that would produce both civilian and military aircraft. Many analysts guessed that a linkup of the companies' respective military businesses, which do not overlap, was more likely than a merger of the commercial-jet businesses, which compete head-to-head. The reports nonetheless rattled Europe, where Airbus' partners warned that the result would make competition "even more fierce." They added gamely that if there were a U.S. merger, "world airlines would feel even more the need of having another strong competitor, such as Airbus," to encourage price competition. In other words, one good heavyweight deserves another.

--With reporting by Helen Chang/Singapore, Bruce Crumley/Paris and Sylvester Monroe/Los Angeles