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Tue, Oct 25, 2022

Boeing and Airbus Compete to Equip New Saudi Airline

Hot in the Desert

Saudi Arabia’s Public Investment Fund—referred to in economic circles as PIF—is in contemporaneous talks with Boeing and Airbus regarding orders for upward of eighty jets that will serve as the core fleet for a new Saudi national airline.

Insisting upon anonymity, parties with knowledge of the proposed deal have reported PIF seeks to purchase approximately forty airliners outright and retain purchase options on a similar number of planes.

Comprising both single-aisle and wide-body aircraft models, the acquisition’s requirements suggest the inchoate airline will serve both domestic Saudi and international destinations.

Saudi Arabia asserted in 2021 that it would found a second national airline alongside flag-carrier Saudia as part of Vision 2030—a sweeping, multi-billion-dollar initiative by which the Middle Eastern nation proposes to diminish its economy’s dependence upon oil. The start-up air carrier—which Middle Eastern news outlet Arabian Business reports will operate under the moniker RIA—is to be based in the Saudi capital of Riyadh, and serve to further the inland city’s aspiration to grow into an international business hub. RIA will also set out to compete with larger Gulf-Region carriers for global transfer traffic.

For the emergent carrier’s short-haul routes, PIF is evaluating Boeing’s 737 Max and Airbus’s A320 neo-series. Consideration for long-haul routes is currently split between Boeing’s 787 Dreamliner and new 777X—the latter having yet to enter service—and Airbus’s A350 and re-engined A330 neo. Whether or not the fleet purchase might be split between the two manufacturers remains unknown.

What is known, however, is that the new airline is expected to name Englishman Tony Douglas its chief executive officer. Only last week, Mr. Douglas stepped down as head of Etihad Airways—a global powerhouse with which the Saudi startup is likely to compete for intercontinental traffic.

Saudi Arabia is targeting thirty-million international transit passengers by 2030—a drastic increase from the four-million the country currently hosts. Sources within the Saudi government suggest that meeting such a lofty ambition will require RIA to eventually operate over 150 routes across Europe, North America, South America, Africa, and Asia—an undertaking apt to necessitate a $30-billion investment. Comparatively, Emirates currently flies to 158 destinations in 85 countries.

It is understood that RIA has been submitted to PIF as a preferred option. The final decision pertaining to the air-carrier’s name will likely be made by Saudi Crown Prince Mohamed Bin Salman.

FMI: www.alternativeairlines.com/ria

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