Boeing wins wide-body order for Saudi Arabia’s new airline, looks set to battle Gulf neighbors

Boeing confirmed Tuesday that it has received orders for up to 121 787 Dreamliner wide-body jets from two Saudi Arabian airlines – a huge boon for the US plane maker after a month of sluggish orders.

Saudi Arabia’s new airline, Riyadh Air, which Crown Prince Mohammed bin Salman announced over the weekend, will receive 39 jets, with options to order 33 more. Boeing said state-owned Saudia, formerly Saudi Arabian Airlines, will receive 39 jets with options for 10 additional.

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At list prices, the order is worth about $35 billion, although airlines often pay discounted prices for new planes.

The White House celebrates the deal, as does Boeing sold 200 planes to Air India this early year.

“Together, these agreements will support more than one million American jobs in the aerospace supply chain in 44 states,” White House press secretary Karine Jean-Pierre said. “This partnership is another milestone in eight decades of cooperation between Saudi Arabia and American industry.”

Riyadh Air, owned by the Saudi government’s sovereign wealth fund, will serve more than 100 global destinations by 2030, the Saudi state news agency said. Former Etihad CEO Tony Douglas will run the airline.

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The announcement comes as the latest move in Saudi Arabia’s efforts to diversify its economy beyond oil. As part of that campaign, the country has invested heavily in the tourism and aerospace industries. The new airline is expected to add an additional $20 billion to non-oil gross domestic product growth, the Saudi Press Agency said.

It is unclear how Saudia and Riyadh Air will co-exist. Saudia, a member of the SkyTeam alliance, typically plays a less “transit” role than other Persian Gulf carriers, which transport passengers globally through central hubs in terms of logistics. geography. Instead, the airline has focused more on transporting passengers whose origin or final destination is in Saudi Arabia.

The announcement suggests that Riyadh will instead focus on connecting remote global destinations for transit passengers while capturing demand to and from Saudi Arabia – underscoring its advantageous location. of the country.

“The new national airline will take advantage of Saudi Arabia’s strategic geographical position between the three continents of Asia, Africa and Europe, allowing Riyadh to become a gateway to the world and a global destination for air travel. transport, commerce and tourism,” the Saudi Press Agency said. .

Such a move would create a fiercer competition for passengers transiting alongside existing Gulf carriers – Emirates, Etihad and Qatar – and Turkish Airlines. In recent years, Turkey has managed to transform itself into a major global carrier through its hub in Istanbul, which is significantly closer to Europe than the Persian Gulf.

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Two Saudi airlines are said to have spoken to Boeing and European plane maker Airbus. But the subsequent all-Boeing order was a major blow to Airbus; Both aircraft manufacturers are grappling with disrupted supply chains in an attempt to meet growing demand for wide-body aircraft.

Boeing is expected to resume deliveries of completed 787 planes in the coming days, after halting them last month due to data analysis problems. The The Federal Aviation Administration has approved the resumption of deliveries after signing off on Boeing’s fixed analytics last week.