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Saudia Group Signs Deal with Lilium to Purchase 100 eVTOL Jets

The deal will make Saudia Group the first aviation company in the Middle East and North Africa region to purchase 100 eVTOL jets from Lilium. SPA
The deal will make Saudia Group the first aviation company in the Middle East and North Africa region to purchase 100 eVTOL jets from Lilium. SPA
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Saudia Group Signs Deal with Lilium to Purchase 100 eVTOL Jets

The deal will make Saudia Group the first aviation company in the Middle East and North Africa region to purchase 100 eVTOL jets from Lilium. SPA
The deal will make Saudia Group the first aviation company in the Middle East and North Africa region to purchase 100 eVTOL jets from Lilium. SPA

The Saudia Group signed on Thursday a deal to purchase 100 electric vertical take-off and landing (eVTOL) jets from the German company Lilium, a leading electric aircraft manufacturer and pioneer in Regional Air Mobility (RAM).

The agreement includes 50 confirmed aircraft and 50 optional aircraft.

The deal, which will make Saudia the first aviation company in the Middle East and North Africa region to purchase 100 eVTOL jets from Lilium, is an extension of the memorandum of understanding signed between the Saudia Group and the Germany-based air taxi developer in October 2022 during the Future Investment Initiative conference in Riyadh.

According to the deal, the Saudia Group is scheduled to receive its first electric aircraft in the fourth quarter of 2026, coinciding with the launch of eVTOL aircraft flights by the Saudi Private Aviation Company.

The electric aircraft included in the deal are among the first fully eVTOL, where these aircraft can take off and land vertically, eliminating the need for traditional airports. These aircraft can cover a distance of up to 175 kilometers at a speed of up to 250 kilometers per hour, offering significant time savings for individual travelers compared to other options and accommodating six passengers.

This deal will contribute to providing more flights and reducing travel time by up to 90%, including to tourist destinations that typically require long travel times. It also offers an effective solution for transportation in congested areas, reducing traffic and saving time. Additionally, it expands the range of premium services for VIP guests, providing a seamless and luxurious travel experience, which will also enhance tourism and business in the Kingdom.

The Saudia Group's agreement with Lilium aligns with the goals of the Saudi Vision 2030 and the National Transport and Logistics Strategy. The deal will help boost the tourism, entertainment, and sports sectors, facilitate the transport of guests from around the world, and support the goal of transporting 330 million passengers and 150 million visits. Moreover, it will provide easy movement for pilgrims during the Hajj and Umrah seasons, aligning with the target of receiving 30 million Umrah performers.

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Non-Oil Activities Drive Saudi Economic Diversification Efforts

A view of containers at Jeddah Islamic Port on the western coast of Saudi Arabia (Saudi Ports Authority)
A view of containers at Jeddah Islamic Port on the western coast of Saudi Arabia (Saudi Ports Authority)
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Non-Oil Activities Drive Saudi Economic Diversification Efforts

A view of containers at Jeddah Islamic Port on the western coast of Saudi Arabia (Saudi Ports Authority)
A view of containers at Jeddah Islamic Port on the western coast of Saudi Arabia (Saudi Ports Authority)

Non-oil activities are playing an increasingly pivotal role in diversifying Saudi Arabia’s economy, currently contributing 51% to the total real GDP, with expectations to reach 65% by the decade’s end.

This shift aligns with the country's efforts to rely on varied income sources across multiple sectors and enhance human capital development in line with Vision 2030.

Saudi Arabia leads in cleaner hydrocarbon energy production and is a frontrunner in renewable energy sectors such as green hydrogen, solar, wind, and others. Notably, it is establishing the world’s largest green hydrogen production facility with a total investment of $8.4 billion.

Faisal Al-Ibrahim, Saudi Minister of Economy and Planning, highlighted the sustained strong growth of non-oil activities since the inception of Vision 2030, constituting 51% of the real GDP, surpassing the oil sector's contribution.

He emphasized the Kingdom’s achievements and prioritized accelerating economic diversification and enhancing human capital development.

“We are now on the brink of a new economic era that will witness transformative changes in the coming decades,” affirmed Al-Ibrahim.

Experts speaking to Asharq Al-Awsat anticipate non-oil sector participation to rise to approximately 65% by 2030, driven significantly by private sector contributions. They noted significant economic evolution towards income sources beyond oil, such as investments in coastal infrastructure projects.

Dr. Abdullah Al-Jassar, member of the Saudi Energy Economics Association, believes the current 51% contribution of the non-oil sector will increase to about 65% by the decade’s end, bolstered by substantial private sector involvement.

He highlighted Saudi Arabia’s notable economic shift towards relying on non-oil activities as a primary source of growth, propelled by key factors including ambitious Vision 2030 programs aimed at economic diversification and reducing oil dependency.

Massive government investments in infrastructure and developmental projects in non-oil sectors like tourism, particularly between 2015 and 2020, exceeding billions of riyals, significantly accelerated economic diversification and renewable energy sector development.

Al-Jassar pointed out that “tourism leads the forefront of key sectors currently relied upon by the non-oil economy,” growing at an average annual rate of 10%, contributing 10.4% to the GDP according to the Q1 2024 Statistics Authority report.

This also includes sectors like mining, manufacturing, and agriculture.

He expects expanding promising sectors such as biotechnology, artificial intelligence, digital economy, and developing logistics services infrastructure to be crucial for export operations, advancing non-oil activity growth.

Al-Jassar assumes non-oil activities will continue to accelerate in the coming years, given the clear roadmap for diversifying the non-oil economy, alongside emerging opportunities attracting more investments to fund their activities. This will enhance Saudi Arabia's resilience against future economic challenges triggered by oil price fluctuations.

Financial advisor Ahmed Al-Jubeir emphasized Saudi Arabia’s long-term strategy for non-oil economic growth, aiming to enhance society, tackle inflation, and strengthen economic, financial, and monetary policies under Vision 2030.

He noted that this strategy would diversify revenue sources without relying on oil, ensuring the sustained evolution and prosperity of the Saudi economy.

This includes investing in citizens, improving their income by providing employment opportunities for all, solving unemployment and housing issues, and increasing women's participation in the workforce to support human resources.