Saudia Group to acquire 10 Airbus A330 Neos for flyadeal's long-haul expansion push

Budget airline's first wide-body jet order comes as it seeks to carry more Umrah and Hajj pilgrims

An Airbus A330-900 Neo carries out a display flight at the Farnborough airshow in Britain. EPA

Saudia Group has signed a firm order for 10 Airbus A330 Neos for its low-cost airline flyadeal, lining up the carrier's first wide-body jets order to help build its long-haul route network and capture more pilgrim traffic.

The total deal including the firm order and the jet engines is estimated to be worth more than $2 billion, Steven Greenway, chief executive of flyadeal, told The National.

The long-anticipated order also includes purchase rights for 10 additional A330 Neos, according to the aviation group that also controls national carrier Saudia.

Deliveries are expected to start in July 2027 and all 10 aircraft will be handed over to flyadeal by 2029.

The All-Airbus operator selected the A330 Neo after comparing it with Boeing's 787-9 because of its more favourable delivery slots, shorter pilot training times and better seat economics, Mr Greenway said.

"Airbus provided us with very good delivery slots that we couldn't get on the 787, that's the bottom line," he said in an interview. "We couldn't get a 787 early enough, we certainly couldn't get it by 2027, we'd have to wait for a few more years and that was problematic for us."

Flyadeal's A330 Neo will most likely be configured to fit 420 to 430 seats and will include a small premium cabin, though the airline is still working on the final details, he added. This requirement made the A330 Neo a more suitable option as the 787 Dreamliner cannot accommodate this number of seats.

"We needed something with over 400 seats to be competitive with the other long-haul, low-cost carriers that were coming into the market," he said.

"You had a unit cost that was one of the lowest out there. So that was very compelling ... The range gave us everything that we wanted to do to reach Southeast Asia, including Manila or Jakarta."

The A330 Neo has a single engine supplier, with UK engine manufacturer Rolls-Royce's Trent 7000 engine powering the plane.

However, the engine component of the flyadeal agreement has yet to be finalised, as talks are continuing on guarantees for spare engines and turnaround times, Mr Greenway said.

Saudia Group is also negotiating local contracts for the maintenance, repair and overhaul of the engines in the kingdom, he said.

"We're very close, I think it's only a month or two away," he said.

flyadeal

US tariffs and supply chain woes

Mr Greenway is part of a high-level delegation from Saudia Group that is scheduled to visit Airbus's production facilities in Toulouse on Wednesday.

Asked about any potential impact on flyadeal's Airbus narrowbody deliveries, due to the trade war unleashed by US President Donald Trump's tariffs regime, Mr Greenway said the industry is facing heightened uncertainty that makes it difficult to forecast business outcomes.

"It's one of these things of plan for the worst and hope for better. We just don't know at this moment in time and I don't think any airline executive knows," he said.

While Airbus planes are largely made in Europe, some parts and components are manufactured in the US.

"What worries every airline executive at the moment is that we don't know what the impact is going to be on a Boeing aircraft that will be delivered, or an Airbus aircraft that will be delivered at this moment in time."

The US tariffs have created the biggest uncertainty for the aerospace industry since the Covid pandemic and led to disruption in plane delivery plans, due to a breakdown in the industry's decades-old duty-free status.

"We're expecting that it will just make the supply chain worse or more difficult. What it does with the final unit price is another thing altogether, which I think we're all grappling with," Mr Greenway said.

Delta chief executive Ed Bastian said earlier this month that the company would defer its aircraft deliveries instead of paying tariffs on them.

"I don't think we're as punchy as that, we're just trying to work out what the impact is. Airbus have not, to this date, said if there's any impact," Mr Greenway said.

During discussions with Airbus, he will seek to understand how plane parts and materials will be sourced and if his plane deliveries will be affected.

"Number one is, how big is this problem on an A320 and an A330? And what are we exposed to in terms of raw materials, systems like avionics, or other components?" he said. The executive will also ask about Airbus' contingency plans for sourcing parts.

"It's very difficult to plan and understand what the ultimate impact is going to be at the moment."

'Confident' in low-cost, long-haul model

Flyadeal will use the A330 Neo to expand into long-haul destinations in western Europe and South-East Asia in a major push to capture year-long Umrah traffic and to carry more people during the Hajj season.

Potential routes in South-East Asia include the Philippines, Indonesia, Malaysia or Thailand, he said. These will be followed by routes in the subcontinent and in Europe such as Paris and the UK.

The wide-body aircraft will also help flyadeal ferry more passengers into slot-constrained airports such as Dubai International.

"I can put in an A330 and that basically gives me two A320s worth of capacity," Mr Greenway said.

Flyadeal is confident that its low-cost venture into long-haul routes will work as it is targeting a "huge" volume of pilgrims and workers flying in and out of Saudi Arabia.

"Low-yield and high-volume traffic is what we're after," he said.

Pilgrims pray on Mountain of Mercy at Arafat during Hajj pilgrimage

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Flyadeal currently operates wide-bodies on a wet-lease basis during the busy Hajj season. Under a wet lease arrangement, the lessor maintains operational control of flights while providing aircraft and crew to the airline.

"We've tried it, tested it and it's worked," he said. "We know the market well so making that leap to acquire our own aircraft and operate this ourselves is not too much of a stretch for us."

Flyadeal is planning up to 21 premium economy seats on its A330 Neos to meet passenger demand for more comfortable seats on long-haul flights.

"There is small but premium demand for flights for over four to five hours where people are willing to pay for extra real estate, so that's why we're doing it," he said.

"I've seen it work in other models and I'm very confident we can make it work in this case as well."

Outlook

Flyadeal was initially expecting to take delivery of about eight A320 Neos this year but expects delays on some of these amid supply chain problems and US tariffs, Mr Greenway said.

"I'm fully expecting we will have at least four or five confirmed but the remainder are up for grabs," he said. "At the moment we're not expecting the full tranche of aircraft we were planning for."

The airline is going to wet-lease some narrow-body planes over the peak travel period in summer.

The airline, which was profitable in the first quarter, expects robust travel demand in the summer and a "material impact" from cheaper fuel prices, he said.

Oil prices have dropped after the US tariffs announcement earlier this month raised fears about a global economic recession. Fuel is the biggest single cost item for airlines, making up about 25 per cent of their total costs.

"Any windfall, which this is, is certainly welcome and helps the bottom line of any airline including ourselves," he said.

In June, flyadeal will roll out its 'all you can fly' pass for international routes, particularly between Riyadh and Dubai, he said. This entitles subscribers to a minimum of one flight a month.