Saudia Group Places Significant Order for Airbus Aircraft

On Monday, the Saudia Group, which owns Saudia airline and budget carrier flyadeal, announced a substantial order of 105 Airbus narrow-body aircraft. This move marks a significant milestone for the European aircraft manufacturer Airbus, as it secures a major deal from Saudi Arabia.

Details of the Aircraft Order:

The order includes 12 A320neo and 93 A321neo single-aisle aircraft, described by Saudia Group’s Director General Ibrahim Al Omar as the largest in Saudi Arabia’s history. 

Specifically, Saudia airline will receive 54 of the A321neo jets, while flyadeal will acquire 12 A320neos and the remaining A321neos.

Financial Aspects and Discounts:

While the financial details were not officially disclosed, the organisers of the Future Aviation Forum in Riyadh estimated the order’s value to be close to $19 billion. 

Typically, such large orders come with substantial discounts from list prices, which in 2018 placed the A321neo at around $130 million each. 

Flyadeal CEO Steven Greenway confirmed that Saudia secured the order at a discounted rate, which is standard industry practice.

Saudi Arabia’s Ambitious Aviation Plans:

This order is part of Saudi Arabia’s broader strategy to establish itself as a regional aviation hub. The kingdom has already announced the launch of a new airline, Riyadh Air, a massive six-runway airport, and a significant order of 78 Boeing 787 Dreamliners last year. 

The latest Airbus order emphasizes Saudi Arabia’s aggressive expansion plans under Crown Prince Mohammed Bin Salman’s Vision 2030, aiming to diversify the economy away from oil dependency by boosting tourism and other sectors.

Competitive Dynamics and Strategic Decisions:

The announcement, made at the King Abdulaziz Conference Center, unexpectedly highlighted Airbus over Boeing. Riyadh Air had previously indicated plans to order Boeing 737 MAX jets, yet no such order materialized, placing Airbus prominently in the spotlight.

Tony Douglas, CEO of Riyadh Air, hinted at strategic considerations behind the timing of the announcement, avoiding potential negative media contexts related to Boeing’s recent issues. 

Douglas emphasized a balanced approach between suppliers, indicating that Riyadh Air aims to maintain a split between Airbus and Boeing for its fleet.

Supplier Challenges and Delivery Timeline:

Despite selecting Airbus amid ongoing delivery delays, Flyadeal’s Greenway acknowledged the industry’s widespread supply constraints. Saudia Group’s aircraft are scheduled for delivery from the first quarter of 2026 through to 2032. 

This timeline aligns with Saudia’s rapid expansion plans as part of the Vision 2030 program, which aims to enhance the kingdom’s tourism sector.

Broader Context and Regional Implications:

The announcement occurs against a backdrop of regional tensions and closely monitored business activities in the Gulf.

Analysts have pointed to Saudi Arabia’s growing frustration with U.S. policies in the Middle East, though Douglas denied any political influences on the aircraft deals.

As Saudi Arabia places itself as a key player in global aviation, this historic order underscores its commitment to becoming a major aviation hub, leveraging its strategic location and investment capabilities to drive economic diversification and growth.