Saudi budget airline in Boeing deal

Saudi budget carrier flyadeal has agreed to buy as many as 50 737 MAX passenger planes from Boeing as it seeks to expand its regional route network.

The carrier committed to ordering 30 airplanes with options for 20 more in a deal that would be valued at up to $5.9 billion at list prices.

However, airlines typically negotiate significant discounts for such large plane orders.

The deal represents a blow to Airbus, which supplied the airline’s existing fleet of A320s.

“The demand for air transport services in the domestic market of the Kingdom of Saudi Arabia has grown exponentially,” said Director General of Saudi Arabian Airlines, Saleh bin Nasser Al-Jasser. A new brand, with a fresh identity focused on low fares, flyadeal has brought to the market a new choice — which has been received very positively.”

 Saudi Arabia’s domestic air travel market is expected to expand rapidly with carriers such as flyadeal seeking to expand connections with secondary cities throughout the Kingdom.

The Saudi Arabian Airlines unit is based in Jeddah and offers flights to eight domestic destinations including Riyadh, Jeddah, Dammam, Qassim, Tabuk, Gizan, Madinah and Abha.

The deal is subject to both sides concluding final terms and conditions and a purchase agreement, Boeing said on Friday.

Al-Jasser added: “The low-fares airline will continue to expand rapidly, and the addition to the fleet aligns well with flyadeal’s target to grow its presence in the domestic market and cover new markets outside of Saudi Arabia.”

The 737 is Boeing’s fastest-selling aircraft, with more than 4,800 orders to date.

The planes being sold to flyadeal can carry 189 passenger in a one-class configuration. It carries 12 more passengers than its Airbus A320 rival.

Middle East carriers are emerging from a turbulent period as carriers come under pressure from overcapacity and increased competition. However some budget carriers have weathered the industry downturn better than their larger rivals which have been forced to slash thousands of jobs and and look at other savings.