SaudiGulf Airlines selects V2500 engines for four new aircraft

Updated 15 July 2014
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SaudiGulf Airlines selects V2500 engines for four new aircraft

SaudiGulf Airlines has selected the International Aero Engines’ (IAE) V2500 engine to power four A320ceo aircraft and also signed an eight-year V-ServicesSM maintenance service agreement with IAE.
SaudiGulf is a new airline based in Saudi Arabia with headquarters in Dammam and is planning to commence services in 2015.
"As a new airline, our success is dependent upon establishing a well-developed, quality fleet before we begin our operations," said Tariq Al-Qahtani, chairman, SaudiGulf Airlines.
"With the combined technology of Pratt & Whitney, Japanese Aero Engines Corporation and MTU Aero Engines, we know that we are powering and maintaining our aircraft with one of the best options on the market," he added.
"We are excited to expand our partnership with SaudiGulf to include A320ceo aircraft," said Dave Brantner, president, Pratt & Whitney Commercial Engines. "The V2500 engine has a long-standing track record of superior performance and will be a trusted power plant for the A320ceo aircraft for SaudiGulf."
Abdulhadi Al-Qahtani Sons Group of Companies acting through Al-Qahtani Aviation Company, a corporation organized and existing under the laws of Saudi Arabia, represented by Tariq Al-Qahtani as the chairman, announced in 2013 the launch of SaudiGulf Airlines, the first of several new domestic airlines serving passengers in Saudi Arabia.
SaudiGulf will operate three to four daily flights, beginning in 2015 to Riyadh and Jeddah departing from King Fahd International Airport in Dammam.


Gulf ratings untarnished by growing GRE debt

Updated 10 min 47 sec ago
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Gulf ratings untarnished by growing GRE debt

  • Head of equity research at Exotix Capital Hasnain Malik: Investors familiar with the Gulf fully expect debt issuance by governments and their related enterprises to increase
  • Hasnain Malik: The generally very strong financial position of sovereigns in the Gulf and their defensible exchange rates has provided a relative haven for global fixed income investors

LONDON: The sovereign ratings of Gulf countries remain unaffected for now by both the recent and planned debt-raising activities of government-related entities, according to S&P Global.
The agency published a research note on Tuesday following investor concerns about the implications of significant amounts of debt being raised by government-backed entities such as investment funds and oil companies.
Saudi Arabia’s Public Investment Fund (PIF) raised an $11 billion international syndicated loan in September this year, while in July, Saudi Aramco said it might consider acquiring a strategic stake in Saudi Basic Industries Corp. (Sabic) from PIF. This potential acquisition is likely to require funding of up to $70 billion, said S&P Global.
“So far, the level of GRE debt and the potential for these contingent liabilities — obligations that have the potential to materialize on a government’s balance sheet or more broadly affect its fiscal profile — being realized has not led to negative rating actions for Gulf Cooperation Council (GCC) sovereigns,” the S&P report said.
“If contingent liabilities do materialize, they have the potential to negatively affect sovereign ratings,” it added, using Mozambique as an example of where the restructuring of a government-guaranteed GRE loan led to a downgrade of the sovereign rating in 2016.
Hasnain Malik, head of equity research at Exotix Capital, said that most investors anticipated the Gulf region would ramp up debt-raising activities in the near future.
“Investors familiar with the Gulf fully expect debt issuance by governments and their related enterprises to increase. This is in line with their stated strategies,” he said.
“The more the debt that is taken on by government-related enterprises, the more that it will be lumped together with debt taken out by the sovereign in order to assess overall risk. But this is nothing new. Past discussions of the overall debt position of ‘Dubai Inc’ or ‘Qatar Inc’ have grappled with the issue of explicit and implicit government guarantees,” he said.
Rating agency Moody’s said last month that the multibillion-dollar PIF loan demonstrated that Saudi Arabia had a “strong ability to raise alternative funding in the capital markets,” according to its Oct. 17 report.
It then warned that a “significant reliance on broader public- sector borrowing to fund the diversification and development agenda would over time increase contingent liability risks for the sovereign.”
Malik said the region had retained its appeal to investors so far despite the potential rising GRE debt.
“In what has been a tougher environment for emerging market debt this year, the generally very strong financial position of sovereigns in the Gulf and their defensible exchange rates has provided a relative haven for global fixed income investors,” he said.
“The imminent inclusion into JP Morgan’s mainstream global indices of debt will likely put the region closer to the center of the average emerging market fixed income investor,” he said.
S&P Global rates 24 GREs in the Gulf region, with most of the companies enjoying the same rating as the sovereign.