Saudi airline flynas in $8.6b Airbus deal

RIYADH: Saudi low-cost carrier flynas has concluded an $8.6 billion purchase deal with Airbus, a major shareholder said on Thursday.Kingdom Holding Co, which owns a 34 percent stake in the airline, said flynas has finalised the "deal with Airbus for the purchase of new aircraft."

The statement gave no details of the number or type of planes that flynas will acquire but a source close to the negotiations said they are from the A320 family of single-aisle aircraft.

Bloomberg News reported on Wednesday that a flynas order for A320 short to medium haul jets was imminent.

Citing a person with knowledge of the matter, Bloomberg said the airline had been considering a deal for 60 planes plus an option for 40.

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The 10-year-old airline exclusively operates the A320, with a fleet of 29 as of last February, according to its website.

It serves 33 domestic and international destinations with nearly 1,000 weekly flights.

Its chief domestic competitor is state-owned Saudi Arabian Airlines, known as Saudia, which aims to expand its own fleet to 200 aircraft by 2020.

In June last year, Saudia placed an $8 billion order with Airbus for 50 planes.

They will be used for domestic flights, the airline said.

Under its wide-ranging Vision 2030 plan announced in April, Saudi Arabia is trying to diversify its oil-dependent economy.

Among the measures is development of the kingdom's tourism sector, privatisation of state-owned services including airports, and a linking of transport networks to position Saudi Arabia as a regional logistics hub.

Even before it unveiled its economic reform plan the Arab world's largest economy was spending billions of dollars on building and upgrading airports.

Riyadh-based Kingdom Holding is chaired and 95 percent owned by Prince Alwaleed bin Talal.

It is a vast global investor with shares in the Euro Disney theme park, Apple, News Corporation and the US banking giant, Citigroup, among others.

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Airbus said on Wednesday that it had outstripped its own delivery expectations in 2016, closing the gap with Boeing and beating its US archrival on orders.

Airbus said it delivered a record 688 commercial planes, exceeding its own target which was raised in November from 650 to 670. – AFP

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