Saudi Arabia’s start-up airline places ￡6bn plane order in challenge to Gulf rivals
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Riyadh Air has lodged a mammoth $8bn (￡6bn) aircraft order as it ramps up efforts to take on established Middle Eastern carriers such as Emirates.
The Saudi Arabian start-up airline, which is bankrolled by the Saudi state, has struck a deal to buy 60 A321neo short-haul jets from Airbus.
This is in addition to an earlier agreement for 39 Boeing wide-bodies announced last year, which includes the option for another 33.
The Airbus order marks the latest step in Riyadh Air’s bid to muscle in on a Gulf market dominated by some of the world’s biggest airlines, including Dubai-based Emirates and Qatar Airways.
Chief executive Tony Douglas said the Airbus jets will help “support economic growth” by establishing the comprehensive route network needed to transform the city of Riyadh into a global aviation hub.
The move to establish a new airline is a key element of Saudi Arabia’s bid to reduce its reliance on oil by diversifying into new sectors such as transport and tourism.
The airline, which plans to commence flights next year, is also understood to be pursuing an additional deal for more wide-body jets as it looks to expand its fleet further.
It is also exploring plans to enter the cargo market.
Riyadh Air has said it wants to offer flights to 100 global destinations by the end of the decade, which will support Saudi Arabia’s bid to attract 100m tourists a year.
Mr Douglas revealed his ambitions for the airline in an interview with The Telegraph earlier this year: “It’s no secret that for a long time, Saudi Arabia has lagged way behind in terms of global connectivity, and there’s no good example anywhere in the world of a sustainable, fast-growing economy that hasn’t got good connectivity.
“The Kingdom needs a new world-class national carrier that will be its own version of Emirates and Qatar Airways, and the answer to that is Riyadh Air.”
Meanwhile, the deal capped a positive day for Airbus, which also revealed that profits rose 39pc to hit €1.4bn in the three months to September.
That is in stark contrast to the $6bn loss recently posted by rival Boeing over the same period.
The US firm is currently grappling with a strike by 33,000 assembly line workers, coupled with a crisis surrounding the 737 Max after one of the jets suffered a mid-air panel blowout at 16,000 feet last January.
However, Airbus’ A321neo was outselling the Boeing model even before the incident.