عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Saudi Arabia Places Order for up to 121 Planes from Boeing

Two Saudi Arabian airlines said Tuesday they will order 78 jetliners from Boeing and take options to buy 43 more in a major boost for the American aircraft manufacturer. (Asharq Al-Awsat)
Two Saudi Arabian airlines said Tuesday they will order 78 jetliners from Boeing and take options to buy 43 more in a major boost for the American aircraft manufacturer. (Asharq Al-Awsat)
TT
TT

Saudi Arabia Places Order for up to 121 Planes from Boeing

Two Saudi Arabian airlines said Tuesday they will order 78 jetliners from Boeing and take options to buy 43 more in a major boost for the American aircraft manufacturer. (Asharq Al-Awsat)
Two Saudi Arabian airlines said Tuesday they will order 78 jetliners from Boeing and take options to buy 43 more in a major boost for the American aircraft manufacturer. (Asharq Al-Awsat)

Two Saudi Arabian airlines said Tuesday they will order 78 jetliners from Boeing and take options to buy 43 more in a major boost for the American aircraft manufacturer.

The order for Boeing 787s will be divided between Saudi Arabia’s flag carrier, Saudia, and a planned new airline called Riyadh Air, which Saudi officials introduced over the weekend.

At list prices, the combined deal would be worth about $37 billion if the options are exercised, but airlines routinely get deep discounts.

The creation of Riyadh Air by the Saudi sovereign-wealth fund and the growth of Saudia are part of a broader Saudi strategy to diversify its oil-based economy. Saudi Arabia hopes to become a global aviation hub and attract 100 million annual visitors by 2030.

“The ambition here in the kingdom is huge, and this today ... is our first big order,” Tony Douglas, the CEO of Riyadh Air, told CNBC. “There will be more orders."

The planes covered by the orders and options are long-range, two-aisle “widebody” jets, in the industry jargon. Boeing and Europe's Airbus dominate the market.

“Serving the Middle East, in our view, is a very, very important and critical market for widebodies, and we like that Boeing won this one,” said Boeing CEO David Calhoun, who traveled to Riyadh for the announcement.

The Saudi deal is also a boost for the Boeing 787, which the company calls the Dreamliner. Boeing has struggled with interruptions in delivering new 787s for more than two years because of production flaws.

Shares of Boeing Co., based in Arlington, Virginia, rose more than 4% Tuesday.

“We are particularly pleased that Boeing was able to finally conclude these deals with Saudi Arabia after years of discussions, and intensive negotiations over recent months,” said White House press secretary Karine Jean-Pierre. She called the announcement “another milestone in eight decades of cooperation between Saudi Arabia and American industry.”

The Saudi deals will support about 1 million jobs in 44 states across the US supply chain, including 150,000 new manufacturing jobs, according to administration officials.

The planes will be powered by engines from General Electric Co.

The Saudi orders come as a recovery in air travel boosts demand for jets made by Boeing and Airbus.

Last month, Air India announced it had agreed to buy 220 planes from Boeing and 250 from Airbus. Both the Air India and combined Saudi Arabian order rank among Boeing's five largest.

Most Viewed

 
 
Business

Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
TT
TT

Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.