As part of the Kingdom’s highly ambitious (and incredibly expensive) plans to establish and build a new international airline that will compete with the likes of regional incumbents like Emirates in record time, Saudi Arabia is anticipated to announce a multi-billion dollar aircraft order in the coming days.
According to a number of sources, the Saudi Arabian sovereign wealth fund is in advanced negotiations for up to 80 jets to launch its new airline, which has the working title of RIA, with both the US aerospace giant Boeing and the European aircraft maker Airbus.
On Sunday, Reuters cited unnamed sources as saying that a deal between Saudi Arabia’s Public Investment Fund (PIF) and Airbus to purchase about 40 of the latter’s long-range A350 aircraft was almost complete, and Bloomberg cited insiders as saying that the airline’s backers were also in talks with Boeing.
RIA will receive $30 billion in funding from the Public Investment Fund, and although the Kingdom hasn’t yet declared a debut date for the airline, it hopes to see 30 million transfer passengers use its airports over the course of the next eight years.
The A350 order, which costs more than $12 billion USD at list price (although airlines rarely, if ever, pay the full list price), is anticipated to consume a significant portion of RIA’s launch budget.
In an effort to get the best deal, RIA will probably play Airbus against Boeing. According to insiders, both the Airbus A230 series and Boeing 737MAX lines are being considered by the airline as it looks to expand its fleet of single-aisle and widebody aircraft.
The Airbus A350 is believed to be the front-runner in the competition to be RIA’s first widebody aircraft, but the airline is also looking at the Boeing 787 Dreamliner, and both aircraft might end up in the fleet.
It is rumored that RIA hired Tony Douglas, the soon-to-be-ex-CEO of Etihad Airways in Abu Dhabi, to assist start the airline. Douglas has not yet officially acknowledged the transfer, but he left Etihad last week in order to “pursue opportunities elsewhere.”
Douglas, a British-born airline executive with years of experience operating in the Middle East, is credited for turning around Etihad’s ailing fortunes during the past few years. Numerous additional senior officials are also planning to depart Etihad and join Douglas at RIA, according to Arabian Business.