Boeing said Tuesday that it has won commitments from new Saudi airline Riyadh Air and current flag carrier Saudia for as many as 121 Dreamliner widebodies. Under the terms of the tentative contracts, each airline will sign a firm order for thirty-nine 787s and reserve options for a total of 43 more. Riyadh Air’s firm order would specify 787-9s, while the Saudi order would involve 787-9s and 787-10s. Neither of the airlines nor Boeing specified delivery dates.
The agreements form part of Saudi Arabia's wider plan to transform the country into a global aviation hub. The orders support the Kingdom’s goal of serving 330 million passengers and attracting 100 million visitors by 2030.
Saudia now operates more than 50 Boeing airplanes on its long-haul network, including 777-300ERs and a mix of 787-9s and 787-10s. The additional 787s would complement Saudia’s existing fleet.
For Riyadh Air, its order forms part of Saudi Arabia's wider strategy to transform the country into a global aviation hub. “The new airline reflects the ambitious vision of Saudi Arabia to be at the core of shaping the future of global air travel and be a true disrupter in terms of customer experience," said Riyadh Air CEO Tony Douglas, who cut ties with Etihad Airways to become the new airline’s chief executive.
Yasir Al-Rumayyan, governor of Saudi Arabia's Private Investment Fund, will serve as the airline’s chairman. “The airline’s senior management will include Saudi and international expertise,” an official statement carried by the Saudi Press Agency (SPA) said.
SPA said the Public Investment Fund (PIF) would own the airline. As Saudi Arabia’s sovereign wealth fund, the PIF controls assets of about $700 billion, making it about the same size as the region’s other heavyweight pension provider, the Abu Dhabi Investment Authority (ADIA).
“The new national airline represents PIF’s latest investment in the sector, along with the recently announced King Salman International Airport masterplan,” the U.S.-headquartered Sovereign Wealth Fund Institute said.
The state mouthpiece said Riyadh Air would serve as a catalyst for the Saudi National Transport and Logistics Strategy and the National Tourism Strategy by increasing air transport options, raising cargo capacity, and, in turn, increasing international passenger traffic.
Meanwhile, the orders appear to answer questions about whether the launch of the new airline would mean the end of Saudia. That airline’s apparent reluctance to move its base from Jeddah, the traditional home of aviation in the Kingdom, to Riyadh, led Crown Prince Mohammed bin Salman to scrap the idea, only to produce plans for the new airline.