Day one of the Future Aviation Forum (FAF) kicked off yesterday, with national flag carrier Saudia landing the Kingdom’s largest-ever aircraft order. The first day of the gathering also saw the General Authority of Civil Aviation (Gaca) launch two reports on the domestic industry, how it plays into the Kingdom’s economic growth strategy, and a roadmap to turn it into a USD 2 bn industry.

REFRESHER- Some 5k executives from aviation majors including Boeing, Airbus, China’s Comac, and Embraer, along with industry experts, manufacturers and government officials are in the capital for talks on industry trends and the signing of agreements on the sidelines of the forum. Over 70 agreements worth USD 12 bn are expected to be signed at FAF, according to state news agency SPA.

Fast figures: The civil aviation sector has contributed USD 53 bn to the Kingdom’s GDP, according to Gaca’s inaugural State of Aviation Report. Some USD 20.8 bn came from aviation related activities, while USD 32.2 bn came from tourism. The full report has not yet been made public.

A LANDMARK SAUDIA BUY-

Saudia has placed an order for 105 narrow-body aircraft from Airbus, which will see it add additional A320neo aircraft to its fleet, Saudia and Airbus said in statements. The order, worth USD 19 bn, is the largest aircraft order in the Kingdom’s history, according to a statement from the forum. Saudia secured the purchase at a reduced price tag, which is usual in the industry, Flyadeal CEO Steven Greenway told Reuters without providing further details. The aircraft will be distributed between the flagship carrier and its low-cost subsidiary Flyadeal, with Saudia set to receive 54 A321neo, while Flyadeal will get 12 A320neo and 39 A321neo.

The rationale: Saudia wants to increase the number of its passengers to 330 mn and expand destinations to 250 by 2030, it said. The target plays into the Tourism Ministry’s goal to lure in 150 mn tourist trips after it hit its target last year ahead of schedule. It also accommodates a target to increase the number of pilgrims to 30 mn by the end of the decade.

What they said: “Saudia has ambitious operational objectives to meet growing demand. We are increasing flights and seat capacity across our existing 100+ destinations on four continents, with plans for further expansion. The progress of Saudi Vision 2030 is attracting more visits, tourists, entrepreneurs, and pilgrims each year,” Saudia Director General Ibrahim Al Omar said.

The landmark order could have been even bigger but Airbus cannot handle any more deliveries before 2032, Saudia spokesman Abdullah Alshahrani told Bloomberg. “We need more than 180 aircraft but there are no slots,” Alshahrani said. “We need the planes now. That’s our demand,” he said. Saudia will begin receiving aircraft from Airbus starting 2026.

By the numbers: Saudia has 144 aircraft in its fleet include 93 Airbus and 51 Boeing aircraft, according to its website. Its subsidiary flyadeal’s entire fleet is Airbuses.

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Beating Boeing: Saudia signed last year an agreement with US planemaker Boeing for the order of 39 787 Dreamliners with options for ten more aircraft. PIF-owned airline Riyadh Air made a similar order last year with options for an additional 33 aircraft. Riyadh Air was reportedly close to placing a large narrow-body order in November which Bloomberg said involved the Boeing 737 Max planes, but no agreement was closed.

Boeing’s negative press didn’t help: “What happened was the media three weeks later spent every hour of every day writing negative stories about commercial aviation,” Riyadh Air CEO Tony Douglas told Reuters. Political considerations had no bearing on the Boeing agreement being stalled or any other aircraft announcements, Douglas said, telling the newswire that future aircraft purchases will continue to “stay as split [between suppliers] as we can.”

Tried and tested: Flyadeal chose Airbus because it’s familiar with the European planemaker despite delivery delays. “It’s public knowledge there have been constraints and delivery delays for everyone,” he said. “I don’t like it…. [but] what can you do?”

REMEMBER- Saudia could soon land in PIF’s portfolio: PIF reportedly in talks to acquireSaudia as soon as next year to add it to its aviation assets portfolio. PIF could take over Saudia’s ownership from the government with the intention of improving its efficiency and net income. It could be either privatized or merged with Riyadh Air — the second flag carrier being set up by PIF.

AND- Saudia will bid adieu to Riyadh by 2030 to make way for Riyadh Air and will instead base itself out of Jeddah’s King Abdulaziz International Airport

ALSO FROM THE FORUM-

  • Saudi Arabia could be running space tourism trials later this year, Saudi Space Agency CEO Mohammed Al Tamimi said. “Within a window of 60 days from now, there will be an announcement to do some trials here in Saudi Arabia about space tourism,” he said.
  • Local firm Front End is bringing electronic passenger drones to Saudi by the end of the year under a partnership with Chinese drone maker EHang ;
  • Saudi and Kuwait agreed to provide perks to each other’s airlines to boost cooperation. No further details were disclosed.
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