LONDON – In a significant financial deal, Saudia (SV) has signed a loan agreement worth SR11.3bn (US$3bn) for the purchase of 73 new planes. This would be the largest aircraft purchase ever made in Saudi Arabia.
H.E. Engr. Ibrahim bin Abdulrahman Al-Omar, Director General of Saudi Arabian Airlines Corporation, and officials of the six Saudi banks – Al Rajhi Bank, Saudi British Bank (SABB), Arab National Bank (ANB), Samba, Bank AlJazira, and Bank Albilad – signed an agreement concerning the funding of the purchase of 73 new aircraft.
Saudia’s Financial Advisor was HSBC Saudi, and the transaction’s Investment Agent was HSBC Saudi.
According to March 1 report by Saudi news outlet Maaal, there already were rumors at the beginning of the month about the possible purchase of new 70 aircraft between Airbus A321, Boeing 777, and 787.
A Purchase That Includes more Airbus Than Boeing
Both Airbus and Boeing have concluded agreements with SV for the purchase of new aircraft.
So far, 20 A321neos, 15 A321XLRs, and eight Boeing 787-10s have been acquired. Five of the eight Boeing 787-10s have already been accepted into the fleet. On an interesting note, flydeal (F3) canceled a US$6bn order for the Boeing 737 MAX in 2019. Instead, F3 was to go forward with delivery of 30 A320neos ordered by SV.
This latter, long-standing Airbus A320 order has been known for a while, previously announced in the Paris Air Show. And so, when purchased, the new SV aircraft will be added to the 159 already present in the fleet, which are:
- 46 A320-200
- 15 A321-200
- 32 A330-300
- 25 Boeing 777-300ER
- 13 Boeing787-9
- Five Boeing 787-10
Statement from Saudi Arabia’s Minister of Transport
Minister of Transport, H.E. Engr. Saleh bin Nasser Al Jasser said that the occasion marked a major milestone for Saudi Arabia’s aviation sector. Al Jasser said, “This agreement will contribute substantially to the Kingdom’s long-term economic growth and development.
The minister added that the fleet’s fleet expansion would “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.”
Statement from the Chairman of the Saudi Arabian Airlines Corporation
H.E. Engr. Al Jasser, also Chairman of the Saudi Arabian Airlines Corporation said that the national flag carrier’s capacity to partner with the six local banks to conclude the financing structure of this size, for the first time in Saudi Arabia’s aviation history, reinforced the strength of the Saudi banking sector.
Al Jasser said, “The corporation will play a key role in contributing to the overall growth of the Saudi economy by attracting more tourists and pilgrims to the Kingdom.”
“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,” added the Chairman.
Statement from Director-General of Saudi Arabian Airlines Corporation
Commenting on the agreement, Director-General of Saudi Arabian Airlines Corporation, H.E. Engr. Ibrahim bin Abdulrahman Al-Omar, who said that the corporation was proud to partner with the top financial institutions in Saudi Arabia to lead the aviation sector’s recovery amid uncertain market conditions.
Al-Omar added, “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.”
Featured image: Saudia HZ-AK43 Boeing 777-368(ER). Photo: Luca Flores/Airways