Airbus bags $7.4bn Saudia jets deal as carrier considers more orders

Carrier is also evaluating whether or not it will proceed with a Boeing 737 Max order for its budget unit

Saudi Arabian Airlines signed an agreement with Airbus to expand its A320 Neo-family fleet to as many as 100 jets, including the new longest-range narrowbody aircraft, as the demand for air travel in the biggest Arab economy grows.

The airline placed a firm order of 65 A320 Neo-family jets worth about $7.4 billion (Dh27bn) at list prices, including 15 A321 XLRs, with options for 35 additional A320neo aircraft, it said in a statement on Tuesday. Saudia, as the kingdom’s flag- carrier is known, will also be making a decision over larger aircraft within months.

"Year-on-year growth has been in the double digits, both in domestic travel as well as the growing international transit traffic," Saleh Al-Jasser, director general of Saudia, said.

The announcement builds on the carrier's existing 35 planes on order from the Airbus A320neo family that boosts its order to 100 planes. It comes as the state-owned airline seeks to capitalise on "strong" passenger demand growth on domestic, regional and international routes. Saudia, the parent company of low-cost carrier Flyadeal, is also evaluating whether it will proceed with a Boeing 737 Max order for its budget unit.

The carrier is also considering a widebody jet order.

"In addition to the narrowbody order, evaluations are currently underway for widebody requirements, expected to be concluded within the next few months," Mr Al Jasser said.

Saudia has been restructuring its operations since 2015, exiting from non-core businesses with the target of turning profitable by 2020.

The airline announced the deal at the Paris Airshow where the duopoly of plane makers Boeing and Airbus are competing for billions of dollars worth of jet orders. However, Boeing’s orders race has had a setback after the two deadly disasters of 737 Maxs that grounded its best-selling plane.

Airbus and Saudia also agreed to further expand their partnership with the development of technical training, maintenance and other services.

Saudia is the second regional airline to order Airbus' newly-launched A321XLR after Lebanon's Middle East Airlines signed a firm order for four of the jets on Monday.

The airline operates a fleet of more than 150 narrow and widebody aircraft, including 100 Airbus A320 family and A330 jets.

The kingdom is focused on developing its aviation sector as part of a long-term strategy to wean the economy off its dependence on oil.

Updated: June 18, 2019 05:55 PM

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