Saudi Arabia’s national carrier, Saudia (formerly known as Saudi Arabian Airlines Corporation) has signed a $3 billion worth deal with six regional banks to finance the purchase of 73 aircraft.
The funding contract, which is the largest in the airline’s history, will be used to buy 20 Airbus A321neo aircraft, 15 A321XLRs, and 30 A320neos, as well as eight Boeing 787-10 aircraft, as previously announced. Flyadeal, the company’s low-cost brand, will use the Airbus A320neos.
Mr. Saleh bin Nasser Al Jasser Saudi Arabia’s Minister of Transport commented that “this agreement will contribute substantially to the kingdom’s long-term economic growth and development. 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.”
Saudia has made major fleet investments in recent years as part of the kingdom’s Vision 2030 economic diversification plan, which aims to draw 100 million visitors and 30 million Umrah pilgrims each year. In October, the airline received its fifth Boeing 787-10, taking the total number of aircraft it operates to 170.
Despite the huge disruption caused by COVID-19, which the International Air Transport Association (IATA) estimates the airline industry to lose $157 billion in revenue over the next two years, Saudia said that it received total bids of over $4.7 billion.
Al Rajhi Bank, Saudi British Bank, Arab National Bank, Samba, Bank AlJazira, and Bank Albilad are the six banks that are funding the deal. The airline said the agreement covers its funding needs until mid-2024, with financial service organization HSBC Saudi acting as financial advisor and investment agent.
Saudia’s Director General Mr. Ibrahim bin Abdulrahman Al-Omar remarked that “this financing agreement demonstrates our resilience as well as our determination to capture opportunities in securing competitive funding to enable our fleet expansion with a range of new and modern aircraft that will enable us to meet the national aviation requirements in the years to come.”