Saudi Arabia's Record-Breaking Aircraft Order Skips Boeing
Ibrahim Al-Omar, the head honcho of Saudia Group - the authority behind the state-run Saudia airline and the low-cost airline Flyadeal, declared on Monday that the first aircraft deliveries will happen during the initial days of 2026.
"Today, we witness the biggest aviation deal in Saudi history," he said at the Future Aviation Forum in Riyadh, alluding to the agreement with Airbus in his speech.
Saudia Group's present inventory includes 93 Airbus and 51 Boeing planes, according to their official website. This latest agreement contributes to the already-existing Airbus order backlog of 39 aircraft, the European aircraft producer announced in a statement.
Al-Omar didn't specify if it's the number of planes or the total value of the arrangement that makes it Saudi Arabia's largest-ever aviation deal. When CNN inquired about this information as well as the worth of the deal, Saudia Group hasn't responded, whilst Airbus withheld comment.
The organizers of the Future Aviation Forum unveiled in their press release, nonetheless, that the latest order amounted to $19 billion.
Simultaneously, Al-Omar explained that this new deal will aid in the realization of Saudi Arabia's Vision 2030, an initiative aimed at altering the country's economy away from oil reliance. A critical component of the program is transforming the kingdom into a desirable tourist hotspot.
"Saudia has significant operational objectives to correspond to the increasing demand," Al-Omar asserted. "We're augmenting flights and seating capacity on all our over 100 destinations across four continents, with intentions of extended growth."
The nation is aiming to entice 150 million tourists yearly by 2030, as per its National Tourism Strategy.
One more victory for Airbus's competition
The Saudi announcement arrives as Airbus's primary opponent Boeing (BA) suffers under widespread criticism over a string of safety glitches, like the January debacle where part of a fuselage blown off mid-air.
The occurrence provoked multiple probes into Boeing's practices, a management substitution, and pledges to return the company to its former glory.
However, Boeing's fortunes have been on a downward spiral since the two deadly incidents of their 737 Max aircraft in 2018 and 2019, leading to a 20-month suspension of the popular plane. Worsening the situation was the pandemic's impact, which momentarily brought air travel to a complete halt and caused substantial losses for most airlines purchasing Boeing's aircraft.
Since the beginning of the airplane's grounding in 2019, Boeing reported a whopping $31 billion in losses resulting from adjustments. Meanwhile, their stock has plummeted almost 28% since the beginning of this year.
Despite possessing an order backlog equating to almost 5,600 commercial jets valued at $529 billion, producing planes swiftly enough each year to yield a profit remains a challenge for Boeing, as it's grappling with its quality issues. On the other hand, Airbus concluded 2023 with an order backlog of nearly 8,600 aircraft and reported a profit of €3.8 billion ($4.1 billion) in the year.
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The decision of Saudia Group to place a large order with Airbus instead of Boeing for their aircraft deliveries in 2026 is a significant blow to Boeing's business in Saudi Arabia. This new agreement, valued at $19 billion, will contribute to the realization of Saudi Arabia's Vision 2030, which aims to transform the country's economy and make it a popular tourist destination.
Source: edition.cnn.com
