The $3 billion financing deal signed on March 18 by Saudi Arabian Airlines Corporation will go toward its largest fleet expansion ever, with both Boeing and Airbus as the beneficiaries.
The move signals the escalating competition among airlines in the Middle East, with carriers poised for a travel recovery.
The agreement, which will partially finance the purchasing of 73 new jets the corporation previously announced, came together under the financial guidance of HSBC Saudi, the airline’s investment agent in this transaction with the six Saudi banks.
The financing couldn’t have come at a better time for the airline, which has been aiming to capture a portion of the tourism and pilgrimage market as it recovers from the travel standstill induced by the global pandemic this past year.
This agreement will contribute substantially to the country’s long-term economic growth and development, said Transport Minister Saleh bin Nasser Al-Jasser.
“Saudi Arabian Airlines Corporation’s fleet expansion will boost tourism and its allied sectors, generate substantial employment opportunities, significantly improve air connectivity, and enhance the flow of foreign investments, in addition to supporting the kingdom’s efforts to diversify the economy by strengthening the key sectors,” he added.
It allows the corporation the agility to add a majority of Airbus aircraft to its fleet, including 30 A320 Neos for its budget airline Flyadeal, and 20 A321 Neos, 15 A321XLRs as well as eight Boeing 787-10s to Saudia’s fleet. Saudi Arabian Airlines Corporation has already completed the purchase orders, and five of the eight Boeing 787s are in Saudia’s fleet, it said in a statement.
“The global economy will ultimately recover, and we want to ensure that we are fully prepared and well positioned early on to meet the demands of inbound and outbound passengers by serving them to the highest standards,” Al-Jasser added.
Meanwhile in neighboring Qatar, in an effort to fly more efficiently and sustainably, Qatar Airways is grounding its Airbus A380 and A330 fleets and has said its A350 fleet show a commitment to sustainability, said Thierry Antinori, Qatar’s chief commercial officer.
The six Saudi banks providing the funding for Saudi Arabian Airlines Corporation fleet are Al Rajhi Bank, Saudi British Bank (SABB), Arab National Bank (ANB), Samba, Bank AlJazira, and Bank Albilad.