Saudi Arabia’s Flyadeal to decide on Boeing 737 Max order in 'coming weeks,' CEO says

Airline’s decision hinges on timing of aircraft’s availability, CEO says

Saudi employees of the new Flydeal airlines company take a selfie during the launching ceremony held at the King Abdulaziz airport in the coastal city of Jeddah, on August 25, 2017.
Saudi Arabia's new budget carrier Flyadeal said Thursday it will start flying next month, as the kingdom seeks to expand air services to boost tourism in a radical overhaul of its oil-dependent economy. / AFP PHOTO / AMER HILABI

Saudi Arabian low-cost airline Flyadeal will make a decision on whether or not it will proceed with its Boeing 737 Max order in “the coming weeks”, its chief executive said.

Flyadeal's decision hinges on the jet's availability in time to meet the carrier's growth targets, as the carrier seeks to add more domestic routes in the kingdom and enter the international market for the first time, Con Korfiatis told The National. The airline is considering the competing Airbus A320 Neo single-aisle model if it cancels the deal with the US planemaker.

“It could go in any direction, the jury is still out," Mr Korfiatis said in an interview during the Arabian Travel Market in Dubai. “It’s the ability to fulfill the business plan requirements for Flyadeal in the time we foresee, that’s a big driver.”

Flyadeal on order 30 Boeing 737 Max 8s with the option for 20 more in a deal valued at $5.9 billion (Dh21.6bn) at list prices. The airline, which currently operates 11 Airbus A320s, is re-evaluating the order after the re-engined narrowbody model was involved in two deadly crashes in Ethiopia and Indonesia within a span of five months.

Mr Korfiatis expressed confidence in the Chicago-based jetmaker’s ability to fix the jet and said the decision is still “up in the air.”

“We have no doubt that whatever the issue is, it will be addressed,” he said. “It’s Boeing at the end of the day and they’ve been producing aircraft forever. The 737 is the best-selling model ever so from that point of view, there’s no doubt they’ll fix it, it’s a question of timing and if the timing is too late and has a material impact on the growth plans for Flyadeal, then that’s what will drive it the other way.”

The troubled 737 Max jet, the workhorse of airlines, has been grounded globally after the model was involved in two deadly crashes in Ethiopia and Indonesia, within the span of five months.

Boeing is working on a software upgrade to fix the 737 Max jet and new training for pilots that must be approved by regulators before the aircraft is re-certified to resume flying.

The 737 range has been in operation since 1967 and is Boeing's most successful jet commercially. The 737 Max 8 is one of the smaller jets in Boeing's Max family of re-engined narrow-body jets.

Flyadeal, a unit of state-owned Saudi Arabian Airlines or Saudia, plans to grow its fleet to at least 50 aircraft by 2025 to expand its network within the kingdom’s lucrative domestic market where it sees potential for about 24 domestic routes as it eyes international expansion.

The airline is looking to start international service before the end of 2019 or the beginning of next year, depending on whether it gets more aircraft by then, he said. The first route would be in Middle East and North Africa, within a “few hours” range of Saudi Arabia.

The carrier had planned to lease jets until the new planes were delivered.

Flyadeal, which was established in September 2017, carried 2.5 million passengers this year and is targeting a 50 to 100 per cent increase this year, Mr Korfiatis said.

The airline sees potential in future for a codeshare partnership with sister carrier Saudia similar to the one struck by Dubai-based Emirates and sister budget carrier FlyDubai but Flyadeal is currently “too small” to form such a partnership, he said.

Flyadeal, which introduced female cabin crew, sees the potential for female pilots in the cockpit “soon,” he said.

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