Saudi Arabia's new plane lessor and financier AviLease, backed by the kingdom's sovereign wealth fund, has won its first leasing deal as the country seeks to develop its air transport sector.
AviLease, which is wholly owned by the Public Investment Fund, started operations on Monday in a ceremony in London to coincide with the Farnborough Airshow.
The lessor signed a purchase-and-leaseback deal with Riyadh-based discount airline Flynas for 12 new Airbus A320neo jets, it said in a statement on Tuesday.
Under the agreement, AviLease will buy the aircraft, which will be delivered in 2022 and 2023, and lease them back to Flynas.
"Our company has global ambition and the robust financial backing of PIF," said Edward O'Byrne, chief executive of AviLease. "We are ready to capitalise on the strong and growing Saudi market to scale rapidly and become a leading aviation lessor.
"Our plan is to invest in the most technologically advanced aircraft to enable airlines to operate the most fuel-efficient and environmentally friendly fleet."
Saudi Arabia's Vision 2030 to diversify the economy from hydrocarbons will involve the kingdom developing its air transportation sector, attracting more tourists, and increasing its non-oil gross domestic product growth.
The country aims to increase annual air passenger traffic to 330 million, up from about 100 million currently, and connect Saudi Arabia with more than 250 destinations worldwide by 2030.
AviLease, which was founded in June 2022 and is headquartered in Riyadh, said it will focus on leasing, trading and asset management services.
Dubai Aerospace Enterprise, one of the world's biggest aircraft leasing companies, and Kuwait-based aircraft leasing firm Alafco are among the main players in the Middle East.
AviLease's first leasing customer Flynas said the 12 leased aircraft will help it to grow its fleet with fuel-efficient jets.
"This commitment supports our business strategy and advances our company's ambitious agenda with a new partner, AviLease," said Bander Al Mohanna, chief executive and managing director of Flynas.
The low-cost airline has a fleet of 38 aircraft, operating more than 1,500 weekly flights to 35 domestic and international destinations.
"We see great opportunities for expansion supported by the strategic location of Saudi Arabia and the prospects opened by Vision 2030 for the air transport sector," said Ayed Aljeaid, chairman of Flynas.