In a significant financial deal, Saudi Arabian Airlines (Saudia), the national flag carrier of the Kingdom, closed funding agreements worth SR 11.2 billion ($3 billion) with six local banks to purchase 73 aircraft.
Serving the airline’s fleet expansion strategy, the deal will move along the largest aircraft purchase ever made in Saudi Arabia.
The agreement was signed in the presence of Saudi Transport Minister Saleh Bin Nasser Al Jasser, Saudia Director General Ibrahim Al-Omar, and representatives of the six Saudi banks — Al Rajhi Bank, Saudi British Bank (SABB), Arab National Bank (ANB), Samba, Bank AlJazira, and Bank Albilad.
It is worth noting that the deal will cover Saudia’s aircraft financing requirements to mid-2024.
The carrier had completed purchase agreements for Airbus and Boeing aircraft that included 20 A321neo, 15 A321XLR, as well as 30 A320neo for flyadeal, and eight Boeing 787-10.
Five Boeing 787-10 aircraft have been inducted into the corporation’s fleet so far.
Speaking at the signing ceremony, Al Jasser said that the occasion marked a major milestone for Saudi Arabia’s aviation sector.
“This agreement will contribute substantially to the Kingdom’s long-term economic growth and development,” said the minister.
“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, in addition to supporting the Kingdom’s efforts to diversify the economy by strengthening the key sectors,” he added.
“The robust capacity from our national flag carrier in partnership with the six local banks to conclude the financing structure of this size, for the first time in Saudi Arabia’s aviation history, reinforces the strength of the Saudi banking sector,” he commented, adding that Saudia 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 at the highest standards,” Al Jasser concluded.
Commenting on the agreement, Al-Omar voiced Saudia’s pride in partnering with the top financial institutions in Saudi Arabia to lead the aviation sector’s recovery amid uncertain market conditions.
“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,” said the director-general
Though the airline industry has been going through a challenging phase in 2020 and 2021, the total bids received for this financing exceeded SR18 billion ($4.8 billion), which shows the market’s confidence in Saudi Arabian Airlines Corporation’s strategic long-term plans and its ability to deliver substantial growth in line with Saudi Vision 2030.
The agreement underscores Saudia’s commitment to actively promoting the Kingdom’s flourishing tourism industry and the Hajj and Umrah sector in line with the Vision 2030 objectives to attract 100 million tourists and 30 million Umrah pilgrims annually.
Even as several international airline companies were shrinking their businesses in the past 18 months, Saudia continued to focus on improving its facilities to capture a sizeable market share when the market rebounds.
By expanding its fleet with state-of-the-art aircraft from top manufacturers in the global aerospace industry, the carrier also aims to further enhance its world-class passenger experience.
