LONDON – SaudiGulf Airlines, owned by Al-Qahtani Aviation, has signed a commitment for 10 Airbus A320neo aircraft. Based on 2018 list prices, this deal is valued at around $1.106 billion.

The order was signed at the Bahrain International Airshow.

Sheikh Tariq Abdulhadi Al Qahtani, the Chairman of the carrier expressed his excitement over receiving the aircraft.

He said that this order represents an “expansion in keeping with our intention to see the Saudi aviation sector continue to develop and grow in support of the Saudi Vision 2030”.

SaudiGulf and Airbus representatives signing the deal at the Bahrain International Airshow 2018.

Christian Scherer, the CCO at Airbus stated that the manufacturer is honored to expand its partnership with the carrier and that the A320neo will offer the carrier “lower operating costs, greater fuel efficiency and superior passenger comfort.”

The A320neo has now acquired over 6,200 orders from more than 100 customers since the new variant launched in 2010. 

Background Check: SaudiGulf

SaudiGulf is a relatively new player in the aviation arena. The carrier was founded in 2013 by the Al-Qahtani family.

Over the span of three years, the framework of the airline was formed before it achieved its air operator’s certificate in June 2016. 

Four months later on October 29, 2016, the carrier launched its first flights featuring daily trips between Dammam and Riyadh.

Source: Dirk Grothe • Planespotters

At this point, the launch of the airline was already delayed due to regulatory implementation from Saudi Arabia’s General Authority of Civil Aviation.

The carrier currently has a fleet of six Airbus A320-200s that operate in a two-class setup. 16 seats are on offer in Business as well as 120 seats in Economy, offering a total of 136 seats per flight. 

Al-Qahtani Aviation also placed an order for 26 Airbus A220-300s in 2015, with 16 of them allegedly going to SaudiGulf. However, Airways has not been able to confirm whether this order stands. 

The carrier flies currently to the following destinations across the Middle East and Asia:

  • Saudi Arabia:
    • Abha
    • Dammam
    • Jeddah
    • Riyadh
  • Pakistan:
    • Islamabad
    • Karachi
    • Lahore
    • Sialkot
  • United Arab Emirates:
    • Dubai

Saudi Vision 2030

As mentioned above, the new A320neo order falls into the Saudi Vision 2030’s Private Sector element.

Within this element, aviation has been labelled in the white paper as “playing a key role in this strategy”.

The Saudi Government believes that through the use of privatization, airports have been able to expand, meaning that new carriers can be introduced into the country. 

The last two decades have backed this up, seeing only 15 million passengers travel through Saudi Arabia in 1991 to 84 million passengers through in 2016. 

Out of this increase in passenger figures, International traffic has increased by 9.6% in 1991-1995 to 11.7% in 2010-2016. 

Traffic from Saudi Arabia’s Jeddah, Riyadh, Dammam, and Madinah currently account for more than 80% of passenger air traffic in the country.

The Saudi Government has placed several factors into the recent growth, hence the reasoning for Saudi’s Vision 2030 in the aviation sector:

  • Economic growth – The country has experienced growth in its real GDP with it doubling from the height of the previous oil boom in 1980 to 2016.
  • Migration – The economy has prospered even further thanks to the net migration and population of the country doubling since 1990 at 32 million people.
  • New Airlines – Several new carriers such as flyadeal, Nesma Airlines and SaudiGulf have been able to commence operations due to strong economy growth.
  • Open Skies Policy – Flexibility of aircraft flying through Saudi Arabia has enabled more traffic to pass through, hence increasing economic value due to transactions made from passengers abroad. 

Overall, SaudiGulf Airlines has been able to expand rapidly as a result of its home country’s strong economic benefits.

It will be interesting to see how the carrier will position itself in different countries using the A320neos and A220-300s as it receives them over the next five to ten years.

We could potentially see the carrier expanding outside of the Middle East if this level of initial success continues.