Pesha Magid
RIYADH (Reuters) – Saudia Group, owner of Saudia airline and budget carrier Flyadeal, placed a large order for 105 narrow-body Airbus jets on Monday, marking the European planemaker’s comeback just months after Boeing (NYSE:) tends to win more Saudi business.
Ibrahim Al Omar, CEO of Saudia Group, called the order for 12 narrow-body A320neo and 93 A321neo aircraft the largest in the country’s history.
The state-owned group said Saudia will receive 54 A321neo aircraft, while Flyadeal will acquire 12 A320neo aircraft and the remaining A321neo aircraft.
Neither side disclosed the amount, but organizers of the Future Aviation Forum in Riyadh, where the order was announced, estimated it at about $19 billion.
Airbus doesn’t publish prices, but each A321neo cost about $130 million at 2018 list prices. Flyadeal CEO Stephen Greenway said Saudia received the order at a discount, which is typical in the industry.
Saudi Arabia is spending heavily to become a new regional aviation hub, launching a new airline, Riyadh Air, announcing a huge six-runway airport and ordering 78 Boeing 787 Dreamliners last year.
The latest announcement, made at the Versailles-like King Abdulaziz Convention Center with runways on the floor and faux planes serving as conference rooms, unexpectedly sidestepped a possible order from Boeing, whose presence has been muted.
In November, Saudi Arabia’s newest airline, Riyadh Air, said it was weeks away from placing a large order for the single-aisle jet, which Bloomberg News reported was for the Boeing 737 MAX.
Months later, no such order has emerged, and Monday’s announcement firmly puts the spotlight on Airbus.
“What happened is, three weeks later, the media spent every hour of every day writing negative stories about commercial aviation,” Riyadh Air CEO Tony Douglas told Reuters on Monday.
He said he wasn’t just referring to Boeing’s latest crisis after the group pulled the plug on the 737 MAX 9 in January.
“The last thing I want to do is give my good news and put it in the context of events happening elsewhere that are not as positive,” he said. “Whether Airbus can’t deliver on time (or) Boeing has some technical problem.”
SUPPLIER BALANCE Douglas refused to be involved in future fleet decisions. “We will (maintain) a strategy to remain as separated (among providers) as possible,” he said.
Douglas told Reuters last June that the airline had a total of three orders planned for the new airline’s launch.
Analysts say business and other announcements in the Gulf region are being closely watched amid regional tensions caused by the conflict between Israel and the Gaza Strip.
Experts have been signaling for months that Saudi Arabia is growing increasingly frustrated with what it sees as the United States’ failure to rein in Israel.
Douglas denied there was any political element to the stalled Riyadh Air deal or the way the planes were announced.
Flyadeal-owned Greenway said it chose Airbus because it already uses the European supplier, although it has struggled with delivery delays.
“It is common knowledge that everyone has had supply constraints and delays,” he said. “I don’t like it…. (but) what can you do?”
Saudia Group said its aircraft will be delivered from the first quarter of 2026 to 2032.
Saudi Arabia plans to expand rapidly over the next seven years as part of Crown Prince Mohammed bin Salman’s Vision 2030 program aimed at weaning the kingdom off its dependence on oil. Tourism is a key element of the diversification strategy.