Riyadhi
January 3rd, 2007, 08:10 PM
SAUDI ARABIAN Airlines is in negotiations with Boeing and Airbus to buy aeroplanes worth up to $12bn (£6.1bn, E9.1bn) in one of the largest deals of its kind.
The purchase of around 60 planes will bolster the current Saudi fleet of 139, helping it to take on rival Dubai-based carrier Emirates. Local sources say Saudi Airlines, which is government owned, is rapidly expanding and needs a variety of new planes.
“This will take some time to negotiate because it’s going to be a huge order, in excess of 60 planes,” said the source. “They are talking to both Airbus and Boeing. They are growing massively and don’t have enough aircraft to meet demand. Currently they are underplaned [short of aircraft] and leasing aircraft.”
A western source confirmed negotiations were ongoing and that the Saudis would probably split the order between the two Western plane makers, in a similar fashion to recent defence orders.
Civil aviation and major capital expenditure at Saudi Airlines comes under the control of Crown Prince Sultan bin Abdul-Aziz, who is also the defence minister.
Last November, Khaled al-Mulhim, director general of Saudi Arabian Airlines, warned the number of visitors to the kingdom may triple from a current 3.5m in the next 10 years as increased numbers of Muslims visit Saudi Arabia for pilgrimages to Mecca. This will impact on passenger numbers which will grow by 15% annually, more than the current fleet can handle.
The western source said: “Saudi Arabian Airlines has been looking in recent months to ways it can renew its wide bodied fleet.” Director-general Al-Mulhim is already taking emergency measures by leasing aircraft and using long-haul planes for short-haul flights to provide extra capacity.
The Saudi’s last major aircraft order was for 61 Boeing aircraft in 1995, which included several 747s delivered over a four-year period. In 2005, it bought 15 66-seat Embraer planes from Brazil for $400m.
The Saudi order will be one of the biggest of 2007, on a par with the 70 737s Ryanair bought from Boeing in 2002. In October last year, Airbus signed an agreement to sell 150 A320s to China in a deal worth between $53m and $82m a plane.
A spokesman for Boeing said: “We don’t comment on customers.” A spokesman for Airbus said: “We don’t comment on ongoing negotiations.”
The delivery of the new planes will not come in time for the proposed flotation of the Saudi airline in 2008. As part of the float preparations, Saudi Arabian Airlines is currently auctioning stakes in five of its divisions. This started with catering, while cargo, ground handling, maintenance and training will follow in the first half of this year.
The delivery of the new planes will not come in time for the proposed flotation of the Saudi airline in 2008. As part of the float preparations, Saudi Arabian Airlines is currently auctioning stakes in five of its divisions. This started with catering, while cargo, ground handling, maintenance and training will follow in the first half of this year.
Source:
http://www.thebusinessonline.com/Document.aspx?id=299C41DE-C141-4D0D-AE2B-3F1BA994EB4B&doc_page=2
The purchase of around 60 planes will bolster the current Saudi fleet of 139, helping it to take on rival Dubai-based carrier Emirates. Local sources say Saudi Airlines, which is government owned, is rapidly expanding and needs a variety of new planes.
“This will take some time to negotiate because it’s going to be a huge order, in excess of 60 planes,” said the source. “They are talking to both Airbus and Boeing. They are growing massively and don’t have enough aircraft to meet demand. Currently they are underplaned [short of aircraft] and leasing aircraft.”
A western source confirmed negotiations were ongoing and that the Saudis would probably split the order between the two Western plane makers, in a similar fashion to recent defence orders.
Civil aviation and major capital expenditure at Saudi Airlines comes under the control of Crown Prince Sultan bin Abdul-Aziz, who is also the defence minister.
Last November, Khaled al-Mulhim, director general of Saudi Arabian Airlines, warned the number of visitors to the kingdom may triple from a current 3.5m in the next 10 years as increased numbers of Muslims visit Saudi Arabia for pilgrimages to Mecca. This will impact on passenger numbers which will grow by 15% annually, more than the current fleet can handle.
The western source said: “Saudi Arabian Airlines has been looking in recent months to ways it can renew its wide bodied fleet.” Director-general Al-Mulhim is already taking emergency measures by leasing aircraft and using long-haul planes for short-haul flights to provide extra capacity.
The Saudi’s last major aircraft order was for 61 Boeing aircraft in 1995, which included several 747s delivered over a four-year period. In 2005, it bought 15 66-seat Embraer planes from Brazil for $400m.
The Saudi order will be one of the biggest of 2007, on a par with the 70 737s Ryanair bought from Boeing in 2002. In October last year, Airbus signed an agreement to sell 150 A320s to China in a deal worth between $53m and $82m a plane.
A spokesman for Boeing said: “We don’t comment on customers.” A spokesman for Airbus said: “We don’t comment on ongoing negotiations.”
The delivery of the new planes will not come in time for the proposed flotation of the Saudi airline in 2008. As part of the float preparations, Saudi Arabian Airlines is currently auctioning stakes in five of its divisions. This started with catering, while cargo, ground handling, maintenance and training will follow in the first half of this year.
The delivery of the new planes will not come in time for the proposed flotation of the Saudi airline in 2008. As part of the float preparations, Saudi Arabian Airlines is currently auctioning stakes in five of its divisions. This started with catering, while cargo, ground handling, maintenance and training will follow in the first half of this year.
Source:
http://www.thebusinessonline.com/Document.aspx?id=299C41DE-C141-4D0D-AE2B-3F1BA994EB4B&doc_page=2