Boeing's continuing troubles are not affecting the US aircraft manufacturer's chances in the race against its European rival Airbus for a narrow-body aircraft order from Saudi Arabian start-up Riyadh Air, a senior airline executive has said.
Riyadh Air, which is considering both Airbus and Boeing models for its long-awaited narrow-bodies order, plans to announce its decision before the end of 2024, Vincent Coste, its chief commercial officer, told The National on the sidelines of the global aerospace summit in Abu Dhabi.
"We are looking at the long term, we are not looking at onboarding our narrow-body aircraft next year because we still have to take a decision, announce the order and it takes a few years to manufacture these aircraft," he said. "So these short-term issues that Boeing is going through are not impacting our long-term vision."
US plane maker Boeing, which has been struggling with a safety and quality crisis after a door panel blew out mid-air on a 737 Max jet in January, is now also contending with a workers' strike, which could further delay output. The strike has not affected 787 production.
Riyadh Air placed its first aircraft order in March last year when it signed an agreement for 39 Boeing 787 wide-body planes, with the option for 33 more to handle long-haul flights.
The airline is "working closely" with Boeing on the 787 Dreamliner production and "we have members of the team travelling back and forth to the US at the leadership level and the technical level. The relationship with Boeing is excellent", he said.
The Saudi start-up is also considering models including the Boeing 777X or more 787s and Airbus A350s amid talks with both manufacturers for a second wide-body aircraft order. This new twin-aisle jet deal will "take much longer" because the airline has on order the Boeing Dreamliners and the narrow-bodies it will be announcing by the end of the year.
"We are starting to work beyond 2030 because a lot of events, including the Expo 2030 and the World Cup, will be taking place in Saudi Arabia," Mr Coste said.
Start of operations
Riyadh Air, which will debut in the summer of 2025, is considering next July for its first flight during the peak travel summer season and is "working closely" with Boeing and other suppliers on a specific start date, according to Mr Coste. "We are very confident that we will start in summer 2025 and the exact starting date is a matter of making sure that, when we start to sell tickets in early 2025, we have an absolute firm date," he said.
Mr Coste dismissed the idea of having a back-up plan in the form of leased aircraft. "Our plan is to start with our own product next summer. Later this year you will have the opportunity to see our cabin interior and our seats. We want our brand to be in the air from day one."
First flight preparations
Riyadh Air plans to launch two new routes per month over the next five years, a fast pace designed to help the airline reach its goal of 100 destinations by 2030, according to Mr Coste. "We will have a pricing strategy which addresses the balance between the revenue generated from each passenger and the number of seats occupied," he said, noting that the average ticket price will be higher in markets where demand is higher than others.
"Today Riyadh is one of the least connected G20 capitals in the world and we will have to open destinations that are not operated by a non-stop carrier today and when you open a new market, you need to be more aggressive in terms of pricing." Riyadh Air plans to initially focus on direct connections to and from its hub in the Saudi Arabian capital, he said.
"At the beginning, we will have more than enough point-to-point traffic to fill up our aircraft at a good average ticket value, but nevertheless we are also building connectivity through Riyadh airport to ensure that in the coming years we connect passengers from Europe to Asia or vice versa, but that won't be our core model at the early stages," he said.
"Our purpose is to attract passengers into Saudi Arabia and to connect Saudis with the rest of the world and we need to be a competitive airline from a pricing perspective."
Additional partnerships
Riyadh Air, which has announced a series of partnerships with important airlines in strategic regions to help build its route network, is also considering additional partnerships in new regions to fill the gap in its planned network. "We now have two white spots ... one is the Indian subcontinent and we're discussing with a few potential airline partners," Mr Coste said.
"The other white spot is Western Europe where we are also discussing with different potential partners. Once we have covered all these geographies, then we focus on deepening these partnerships and establishing long-term relationships." It has already signed partnerships this year with airlines including Delta, Singapore Airlines, Turkish Airlines, Air China and China Eastern.
