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Boeing looks to make $35m on new Saudi Airline

Widebodies for the airline’s anticipated long-haul international operations will make up the majority of the deal.

The Saudi Arabia Public Investment Fund is nearing an agreement on a new purchase valued at about $35 billion, which might result in Boeing locking in another sizable aircraft order for this year. The large order will be used to expand the fleet of the Kingdom’s brand-new national carrier, which is due to make its formal debut.

Launching a year before schedule

The Saudi Arabia Public Investment Fund invested an estimated $30 billion in various projects as part of the Kingdom’s long-term objectives to overhaul and strengthen its aviation industry. One such initiative was a new national carrier that would operate out of King Khalid International Airport in Riyadh and collaborate closely with Saudia.

The Saudi Arabia Public Investment Fund was already in early talks to acquire roughly 40 Airbus A350 aircraft from Airbus in October, therefore the plan to launch the airline the following year, in 2024, was later moved up to be expected by the end of 2022. Boeing was also the subject of negotiations for planes that would expand Saudia’s fleet and the fleet of the future operator.

However, the year-end launch plans fell through, and on Sunday, the airline—whose name will now be Riyadh Air—officially debuted. The year-end launch schedule was probably postponed to this year because negotiations with Boeing had not yet been resolved. Even while it’s unclear when the transaction with Airbus will be finalized, negotiations with Boeing moved more quickly.

A potential future fleet forecast for RIA

When contacted for comment at the time of writing, Boeing had not yet responded. Although the precise details of the sizeable aircraft order have not yet been made public, it is expected that the Saudi Arabia Public Investment Fund would purchase more widebodies than narrowbodies, particularly for the fleet of the new airline.

Saudia now only flies to less than 100 locations, approximately 30 of which are domestic. Yet, the Kingdom has to be connected to more than 150 routes throughout Europe, North America, South America, Asia, and Africa in order to successfully compete as a global aviation center. And carrier is anticipated to make a significant contribution here.

A widebody fleet strategy plan was developed for the anticipated second national carrier to help meet demand for long-haul international and intercontinental flights. This suggests that, like Saudia’s current widebody fleet, the new airline may eventually operate a fleet of Boeing 787s and 777s.

It will be fascinating to see if the airline chooses to use the Boeing 777X, an aircraft type Saudia has yet to completely commit to despite lengthy conversations with Boeing. Also, the carrier might eventually house Airbus A350s in addition to the anticipated Airbus order, further setting it apart from Saudia in terms of fleet.

To sum up

Although it is undoubtedly unusual for Saudi Arabia to have two national airlines, and the airline is probably going to operate an all-widebody fleet at first, one has to wonder if such objectives will be realized. The carrier will face stiff competition from Emirates, Qatar, and Etihad in addition to its core objective of enhancing connection to the Kingdom.

It will also need to make sure that Saudia’s individual efforts are not overshadowed by its hoped-for newfound success.

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