Saudi Arabia's Flynas firms up $3.73bn order for 30 Airbus narrow-body jets

Twenty-four agreements and initial deals signed at France–Saudi Investment Forum in Paris

Flynas chief executive Bander Al Mohanna (left) and Airbus chief commercial officer Christian Scherer (right) firm up an order for 30 more A320neo family aircraft. Photo: Flynas

Saudi Arabia's discount airline Flynas has firmed up an order for 30 more Airbus A320neo family aircraft worth 14 billion Saudi riyals ($3.73 billion) at list prices, expanding operations in line with the country's ambitions to grow its aviation sector.

The deal takes the airline’s total order with Airbus to 120 A320neo aircraft, including 10 long-range A321XLR jets, the plane maker said on Monday.

The order was signed on the first day of the Paris Airshow.

The budget airline, which operates an all-Airbus fleet, last year said it had approved plans to increase its existing aircraft order to 250, as it seeks to become the biggest low-cost airline in the Middle East.

In 2017, Flynas signed a $8.6 billion order for 120 Airbus jets, which includes 80 firm orders and another 40 purchase rights. In 2019, it signed a firm order for 10 A321XLRs at the Dubai Airshow, taking the total firm orders to 90.

Monday's firm purchase of 30 A320 Neo family jets rounds off its order for 120 aircraft.

Flynas, which began operations as Nas Air in 2007, is partly owned by Kingdom Holding, the investment vehicle of Saudi Arabian billionaire Prince Alwaleed bin Talal.

It currently operates a fleet of 49 aircraft, a mix of 32 Airbus A320 Neos, 13 A320 classic versions and four wide-body A330s.

Flynas's latest aircraft deal comes as the airline boosts its operations in line with Saudi Arabia's Civil Aviation Strategy, which aims to increase the annual passenger traffic to 330 million and connect the kingdom with more than 250 destinations worldwide by 2030.

“Several orders are soon to be announced in aviation and aerospace,” Khalid Al Falih, Saudi Arabia's Minister of Investment, said during a speech at the France-Saudi Investment Forum in Paris earlier on Monday.

More than 20 agreements and initial deals were signed between French and Saudi Arabian companies and government entities at the start of the forum. These covered sectors including energy, manufacturing, waste management and aviation.

The kingdom has big ambitions to develop non-oil sectors such as tourism, travel, aviation and hospitality as part of its Vision 2030 to reduce the economy's reliance on hydrocarbons.

It has set a goal attracting 100 million visitors by 2030, creating a new airline with a base in Riyadh and planning a major new airport in the capital to match its ambitions.

Saudi Arabia now claims the title of the world’s fastest growing tourism destination, according to data from the UN World Tourism Organisation.

In 2022, more than 93.5 million tourists visited Saudi Arabia – 77 million domestic and 16.5 million international visitors.

This year, the kingdom hopes to attract 30 million tourists, after a record first quarter when it hosted 7.8 million international arrivals, Ahmed Al Khateeb, Minister of Tourism for Saudi Arabia, told the investment forum in Paris.

“The pandemic is behind us … we will grow fast this year, we're optimistic,” he said. He added that the target of 100 million visitors by the end of the decade is “very doable”.

He called on investors to capitalise on “amazing opportunities in a virgin market with a high rate of growth in the next decade or two”.

The “opportunity is massive” as the tourism sector currently contributes only 3 per cent to Saudi Arabia's gross domestic product, compared with a global average of 10 per cent, he said.

Besides aviation and tourism, the forum is focusing on investment opportunities for collaboration between Saudi Arabia and France in areas such as energy transition, technology, start-ups and financial services.

“Investment without finance doesn't flow,” Mr Al Falih said.

“The financial sector is full of opportunities.”

Saudi Arabia's estimated credit demand will exceed €1.2 trillion ($1.3 trillion) by 2030 and the country will seek financial investment to feed this credit demand, the minister said.

“We aspire to grow domestic debt market volumes by an estimated half a trillion euros. French banks … are becoming major actors in ESG [environmental, social and governance] financing and already working with the kingdom to support us to achieve our ambitions in this space,” he said.

“By the end of this decade, an incremental investment of more than €3 trillion will have been created in the kingdom and we're going to meet or exceed this target,” Mr Al Falih said.