Saudi Arabia’s Saudia Group to buy 105 Airbus in biggest aircraft deal

Saudi Arabia’s Saudia Group said on Monday it would purchase 105 aircraft from Airbus in what it described as the kingdom’s biggest deal of its kind.

Saudia airline will receive 54 A321neo aircraft, while budget offshoot flyadeal will acquire 12 A320neo and 39 A321neo planes, it said in a statement.

The deal is worth $19 billion, according to a separate statement from the Future Aviation Forum, the conference in the Saudi capital Riyadh where the deal was announced.

‘This landmark agreement entails 105 confirmed aircraft and represents a major milestone for not only the Saudi aviation sector but also for the greater MENA region,’ Saudia noted.

Neither of the parties revealed the value, but the organizers of the Future Aviation Forum in Riyadh where the deal was announced put it in $18 billion range.

Airbus does not disclose the cost of its jets, but the A321neo was valued at approximately $129.5 million per unit from the list prices published in 2018. Flyadeal CEO Steven Greenway said Saudia received the order at a preferential price as it is usual in the airline industry.

The purchase has been termed as ‘the largest aircraft deal in Saudi aviation history’ and is another investment made by Saudi airlines after the announcement of Riyadh Air more than a year ago. Saudi Arabia is investing massively with the launch of a new airline Riyadh Air, the announcement of a new six-runway airport and the purchase of 78 Boeing 787 Dreamliners in 2023.

The latest one, the Versailles-like King Abdulaziz Conference Center with airplane runways on the floor and meeting rooms as planes, jumped over the possibility of an order from Boeing which was relatively absent.

Saudia has ambitious expansion plans over the next seven years due to the Vision 2030 plan by Crown Prince Mohammed Bin Salman to reduce Saudi dependence on oil. Tourism is one of the critical aspects of the diversification strategy.