A substantial acquisition of at least 150 brand-new 737 MAX aircraft is apparently being discussed by the recently established Riyadh Air and Boeing. The potential order follows the carrier’s historic announcement in March that it would buy up to 72 Boeing 787-9 Dreamliners, which was another significant Boeing acquisition.
Needs for a single aisle
Boeing and Riyadh Air have not officially commented on the potential agreement, but Bloomberg reported on Sunday that sources with knowledge of the talks said the Saudi Arabian airline is looking to purchase between 300 and 400 single-aisle aircraft. A Boeing announcement could occur in June at the next Paris Air Show.
Although Airbus is a potential competitor for a share of the overall demand for single-aisle aircraft, maybe with its A321neos, a key advantage for Boeing right now may be its capacity to offer delivery slots in the relatively near future. Bloomberg’s sources claim that until after 2029, Airbus won’t be able to make any meaningful deliveries.
At a conference last week, Brian West, the CFO of Boeing, stated that the company expects to be able to produce about 30 737s per month during the first half of the year, and then 40 per month during the second half. This came after Spirit AeroSystems, Boeing’s supplier, fixed a fuselage production fault, allowing Boeing to begin 737 deliveries last week.
The current market value of a Boeing MAX 8 is about $53 million, making a transaction for 150 aircraft theoretically worth close to $8 billion. However, the majority of important orders for aircraft typically wind up being fulfilled at prices that are greatly reduced.
Air Riyadh
As an addition to Saudi Arabia’s current flag carrier, Saudia, Riyadh Air made its official debut on March 12 of this year. The new carrier, which is owned by the country’s Public Investment Fund, won’t be Saudia’s replacement; instead, it will offer several services that are intended to enhance it.
King Khalid International Airport (RUH), in Riyadh, is where Riyadh Air will base its main operations and from which it would connect the region to larger Asia, Africa, and Europe. By 2030, the airline says it wants to have a network with 100 destinations.
The national aviation strategy of the Kingdom, which aims to quadruple the number of travelers in the nation annually to 330 million by 2030, led to the establishment of the airline. The accompanying National Tourism Strategy states that Saudi Arabia also hopes to welcome 100 million tourists annually by the year 2030.
newly placed Boeing orders
In March, Saudi Arabia ordered for Saudia 39 787-9s and 787-10s, with options for an additional 10 aircraft, and then placed an additional order for Riyadh Air for an additional 39 787-9s, with options for an additional 33 aircraft. The Kingdom’s two flag carriers’ combined orders rank as Boeing’s fifth-largest order in terms of volume.
Which 737 MAX version or versions Riyadh Air is looking to purchase has not yet been made explicit. However, given the airline’s evident interest in the A321neo, it is likely that it will search for a plane with a comparable capacity and range, making the MAX 9 or 10 the most likely candidates.
