Saudia to Buy Up to 100 Lilium Electric Aircraft for Domestic Network

A Saudi Arabian Airlines plane, is seen at the airport of the Red Sea resort of Sharm el-Sheikh, Egypt, August 9, 2021. (Reuters)
A Saudi Arabian Airlines plane, is seen at the airport of the Red Sea resort of Sharm el-Sheikh, Egypt, August 9, 2021. (Reuters)
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Saudia to Buy Up to 100 Lilium Electric Aircraft for Domestic Network

A Saudi Arabian Airlines plane, is seen at the airport of the Red Sea resort of Sharm el-Sheikh, Egypt, August 9, 2021. (Reuters)
A Saudi Arabian Airlines plane, is seen at the airport of the Red Sea resort of Sharm el-Sheikh, Egypt, August 9, 2021. (Reuters)

Saudi Arabian Airlines (Saudia) has signed an agreement with German air taxi developer Lilium to buy up to 100 of its aircraft for use on Saudia's domestic network, the state carrier's chief executive said on Wednesday.

Saudia CEO Ibrahim Koshy said the planes would be "a premium service" that carry four to six passengers, adding "it shows Saudia's commitment to sustainability because we're talking about 100% electric aircraft and we are the first airline in the MENA region that's introducing this as part of their network."

Certification by Saudi regulators is expected in 2025, he said.

Pricing has not yet been agreed because commercial terms have not been finalized, Koshy said.

Lilium, competing in a crowded market for electric Vertical Take-Off and Landing (eVTOL) vehicles, said last month it planned to set up capacity to build some 400 of its Lilium Jets a year, while tapping schemes that provide public research support.

In an interview after the announcement, Koshy said "in the course of this year," Saudia will be looking at an operational commercial network.

"We'll also be looking at the infrastructure that's required," adding because the aircraft are eVTOLs, they do not require airports.

"It's more like a port with charging stations, passengers embarking, disembarking, and that's going to require a whole infrastructure."

Public and private investors would have an opportunity to build such infrastructure, Koshy said, speaking at Saudi Arabia's flagship Future Investment Initiative (FII) conference.

Saudi Arabia aims to be carbon neutral by 2060.

Koshy on Tuesday said Saudia is in talks with planemakers Airbus and Boeing on orders for itself and a new carrier the Kingdom plans to launch, provisionally named RIA.



Pakistan Ends Power Purchase Deals to Cut Costs

A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo
A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo
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Pakistan Ends Power Purchase Deals to Cut Costs

A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo
A power transmission tower is seen in Karachi, Pakistan, January 24, 2023. REUTERS/Akhtar Soomro/File Photo

Pakistan's government has reached an agreement with utilities to end power purchase contracts, including one with Pakistan's largest private utility that should have been in place until 2027, as part of efforts to lower costs, it said on Thursday.

The news confirms comment from Power Minister Awais Leghari to Reuters last month that the government was renegotiating deals with independent power producers to lower electricity tariffs as households and businesses struggle to manage soaring energy costs.

Earlier on Thursday Prime Minister Shehbaz Sharif said Pakistan has agreed with five independent power producers to revisit purchase contracts. He said that would save the country 60 billion rupees ($216.10 million) a year.

The need to revisit the deals was an issue in talks for a critical staff-level pact in July with the International Monetary Fund (IMF) for a $7-billion bailout.

Prior to the prime minister's announcement, Pakistan's biggest private utility, Hub Power Company Ltd, said the company agreed to prematurely end a contract with the government to buy power from a southwestern generation project.

In a note to the Pakistan Stock Exchange, it said the government had agreed to meet its commitments up to October 1, instead of an initial date of March 2027, in an action taken “in the greater national interest.”

A decade ago, Pakistan approved dozens of private projects by independent power producers (IPPs), financed mostly by foreign lenders, to tackle chronic shortages.

But the deals, featuring incentives, such as high guaranteed returns and commitments to pay even for unused power, resulted in excess capacity after a sustained economic crisis reduced consumption.

Short of funds, the government has built those fixed costs and capacity payments into consumer bills, sparking protests by domestic users and industry bodies.

Pakistan has begun talks on re-profiling power sector debt owed to China and structural reforms, but progress has been slow. It has also said it will stop power sector subsidies.