Saudi Arabia launched a new airline, Riyadh Air, and named an industry-veteran CEO in Tony Douglas for the new company this week. The airline, along with current state-flag carrier Saudi Airlines (Saudia) signed an agreement for an order of 72 Boeing-made airplanes.
The agreement for the planes was signed on Tuesday March 14 in the presence of HRH Princess Reema bint Bandar al-Saud and PIF Governor Yassir Al-Rumayyan.
Though different figures for the orders from Riyadh Air and Saudia have been reported in the media, “the list prices for 78 planes would total nearly $37 billion,” a report said, adding that airlines “typically get undisclosed discounts when buying airplanes.”
Reuters reports that the airlines are expected to buy a total of 78, 787s split between the two buyers and have options to buy another 43, a source briefed on the matter told the news service.
If it comes to pass, the deal would be one of the largest U.S.-Saudi private sector deals in recent history, and a shot in the arm for the U.S.-Saudi commercial relationship.
According to Bloomberg, the US administration estimated that the Boeing and GE components of the order mean about 1 million US jobs in 44 states across the American supply chain. That would include about 150,000 new manufacturing positions.
Saudi Arabia is seeking to compete directly with regional transport and travel hubs in Dubai, Abu Dhabi, and Doha.
Recently, the Kingdom also announced significant enhancements and developments for Riyadh’s airport, which will transform it into a global hub and provide a modern experience for visitors and those making connections. It would also enhance the airport as a logistics hub.
Riyadh Air will serve more than 100 destinations around the world by 2030, making use of the kingdom’s location between Asia, Africa and Europe, state news agency SPA said.
The PIF said the new national carrier will “leverage Saudi Arabia’s strategic geographic location between the three continents of Asia, Africa and Europe, enabling Riyadh to become a gateway to the world and a global destination for transportation, trade, and tourism.”
