Saudi Arabia and Boeing strike $37bn deal for 121 aircraft

Update Saudi Arabia and Boeing strike $37bn deal for 121 aircraft
From left: Tony Douglas, CEO of Riyadh Airlines; Yasser Othman Al-Rumayyan, governor of the Public Investment Fund and chairman of Riyadh Airlines; Princess Reema bint Bandar, ambassador to the US; David Callahon, CEO of Boeing; Brad McMalone, senior vice president, commercial airplanes, Boeing (Supplied)
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Updated 14 March 2023

Saudi Arabia and Boeing strike $37bn deal for 121 aircraft

Saudi Arabia and Boeing strike $37bn deal for 121 aircraft
  • 72 Boeing 787 Dreamliner planes set for Riyadh Air
  • White House Press Sec. hails ‘historic’ deal

RIYADH: Saudi Arabia has agreed a $37 billion deal with US firm Boeing which will see the company manufacture up to 121 aircraft to help get the Kingdom's new airline off the ground.

The deal will see Boeing 787 Dreamliner planes with General Electric engines delivered to Saudi Arabia, with 72 of them set for Riyadh Air – the carrier announced by Saudi Crown Prince Mohammed bin Salman on Sunday.

Some 39 of the planes are confirmed for the new airline, which has an option to acquire 33 more.

Riyadh Air is wholly owned by the Public Investment Fund, and its governor Yasir Al-Rumayyan – also chairman of the carrier – said: “This is a momentous day for PIF and Riyadh Air, and highlights our determination to significantly extend Saudi Arabia’s connectivity with the world.

"Our stated commitment is to create a world-class airline and this partnership with Boeing in building the fleet is the next step in achieving the aspirations of Saudi Arabia as a global transportation hub.

"We look forward to fostering strong strategic relationships within the wider aviation ecosystem as we continue to shape the new airline to become one of the leading carriers around the world.”

Stan Deal, president and CEO of Boeing Commercial Airplanes, welcomed the “significant order", adding: "We are incredibly proud of our nearly eight decades of partnership to drive innovation and sustainable growth in Saudi Arabia’s aviation sector. Our agreement builds on that longstanding partnership and will further expand access to safe and sustainable commercial air travel for decades more.”

Riyadh Air is set to make the Saudi capital a gateway to the world and a global destination for transportation, trade, and tourism, according to a statement from the Saudi Press Agency.

Using the Saudi capital as its hub, the airline is expected to add $20 billion to the Kingdom’s non-oil gross domestic product growth and create more than 200,000 direct and indirect jobs.

According to a statement from White House Press Secretary Karine Jean-Pierre, talks between Boeing and Saudi Arabia had been ongoing for years, culminating with "intensive negotiations over recent months".

She said: "Today’s announcement ensures that Boeing and General Electric will anchor Saudi Arabia’s new international airline together with support for a new international airport. 

"This partnership is another milestone in eight decades of cooperation between Saudi Arabia and American industry.  Our administration looks forward to working with Saudi Arabia and all partners in the Middle East to support a more prosperous, secure, and integrated region, which ultimately benefits the American people."

Tony Douglas, CEO of Riyadh Air, described the new airline as reflecting "the ambitious vision of Saudi Arabia to be at the core of shaping the future of global air travel".

He added: "By positioning the airline as both a global connector and a vehicle to drive tourist and business travel to Saudi Arabia, our new 787-9 airplanes will serve as a foundation for our worldwide operations, as we build the wider network and connect our guests to Saudi Arabia and many destinations around the world."

The launch of Riyadh Air is part of PIF’s plan to utilize the capabilities of promising industries and help the Kingdom achieve its goal of economic diversification. The sovereign fund has more than $600 billion in assets and is the main driver of the Kingdom’s efforts to wean itself off oil.

Last November officials announced plans for a new airport in the capital Riyadh — spanning 57 sq. km — that is set to accommodate 120 million travelers per year by 2030 and 185 million travelers by 2050.

The capacity of the existing Riyadh airport is around 35 million travelers.