Riyadh Air orders 72 Boeings worth $17b

Riyadh Air, the new Saudi Arabian carrier launched by the Public Investment Fund (PIF), said it will buy 72 Boeing 787 Dreamliners including 39 confirmed orders with 33 on options, just two days after the airline’s formal announcement.

With an average price tag of US$240 million apiece, this announcement represents a value worth US$17.28 billion at list prices. Airlines, however extracts hefty discounts on bulk purchase orders, which means the deal could be worth 30-34 percent less, depending on how the officials negotiated the purchase order.

PIF also announced that it will purchase 39 B787 Dreamliners with 10 on options for for the Kingdom’s flag carrier Saudi Arabian Airlines (Saudia), taking the total orders to 121 worth US$29 billion at list price. This marks the fifth largest commercial order by value in its history.

“This unprecedented order for a new carrier – 39 confirmed aircraft with an option to acquire 33 additional wide-body 787-9 Dreamliner airplanes – is a strong signal of intent for Saudi Arabia to become a global aviation hub,” a statement by the PIF said. “This agreement is part of Saudi Arabia’s wider strategic plan to transform the country into a global aviation hub. In total, national carriers today announced their intent to purchase up to 121 787 Dreamliners in what will be the fifth largest commercial order by value in Boeing’s history. This will support the country’s goal of serving 330 million passengers and attracting 100 million visits by 2030.”

In terms of economic impact, in the U.S., the deal is expected to support nearly 100,000 direct and indirect jobs and more than 300 suppliers from across 38 states, including 145 U.S. small businesses, while in Saudi Arabia, the new airline is expected to add US$20 billion to non-oil GDP growth and create more than 200,000 direct and indirect jobs, PIF said in its statement.

The order also underlines the importance of Riyadh Air environmental goals as it aims to operate one of the newest and most sustainable airline fleets in the world, while intending to meet the most stringent noise regulations.

Yasir Al-Rumayyan Governor of the PIF and Chairman of Riyadh Air said: “This is a momentous day for PIF and Riyadh Air, and highlights our determination to significantly extend Saudi Arabia’s connectivity with the world. Our stated commitment is to create a world-class airline and this partnership with Boeing in building the fleet is the next step in achieving the aspirations of Saudi Arabia as a global transportation hub. We look forward to fostering strong strategic relationships within the wider aviation ecosystem as we continue to shape the new airline to become one of the leading carriers around the world.”

The new world-class airline aims to connect millions of leisure and business travelers to more than 100 destinations around the world by 2030 following this partnership with The Boeing Company. Riyadh Air will be at the cutting edge of technology enabling digital innovation at every guest touchpoint while offering an exceptional guest experience with authentic, warm Saudi hospitality at its heart.

Operating from the capital of Riyadh, a thriving international metropolis rich in history and culture with a futuristic vision embodied by Vision 2030, Riyadh Air will help enable the transformation of the capital into one of the world’s top cities economies. The city has a rich history and is home to some of the most ambitious new projects in the world, including King Salman International Airport, Qiddiya, Sports Boulevard, King Salman Park, Diriyah Gate, and the New Murabba Development. Saudi Arabia has a unique strategic geographical location that connects the three continents of Asia, Africa and Europe.

Tony Douglas, CEO of Riyadh Air, said:“The new airline reflects the ambitious vision of Saudi Arabia to be at the core of shaping the future of global air travel and be a true disrupter in terms of guest experience. Riyadh Air’s commitment to its guests will see the integration of digital innovation and authentic Saudi hospitality to deliver a seamless travel experience. By positioning the airline as both a global connector and a vehicle to drive tourist and business travel to Saudi Arabia, our new 787-9 airplanes will serve as a foundation for our worldwide operations, as we build the wider network and connect our guests to Saudi Arabia and many destinations around the world.”

As an airline that will be a global leader, Riyadh Air will equip its airplanes with the most advanced, state-of-the-art features with innovative, best-in-class cabin interiors and experiences, including next generation digital in-flight entertainment systems and connectivity solutions. The first deliveries of the widebody aircraft are scheduled for early 2025.

The establishment of Riyadh Air is in line with PIF’s mandate to unlock the capabilities of key sectors locally to drive the diversification of Saudi Arabia’s economy. The airline will also support the Saudi Aviation Strategy’s broader vision, and enable the National Tourism Strategy, unlocking Saudi Arabia’s cultural and natural attractions to international tourists and creating new jobs.