Saudi Arabian Airlines (SAUDIA) has signed an SAR 11.2 billion (US $3.0 billion) financing deal for fleet expansion purposes. The financing agreement is the largest in the history of Saudi Arabia’s aviation sector.
On Thursday (March 18, 2021), Saudi Arabian Airlines Corporation (SAUDIA) announced the signing of a SAR 11.2 billion (US $3.0 billion) financing deal for fleet expansion, the largest in the history of Saudi Arabia’s aviation sector. The agreement, which covers aircraft financing, was signed in the presence of the Kingdom of Saudi Arabia’s Minister of Transport, H.E. Engr. Saleh bin Nasser Al Jasser, by Saudi Arabia Airlines Corporation’s Director General, H.E. Engr. Ibrahim bin Abdulrahman Al-Omar and representatives of six Saudi banks. The participating financial institutions included Al Rajhi Bank, Saudi British Bank (SABB), Arab National Bank (ANB), Samba, Bank AlJazira and Bank Albilad, with HSBC Saudi acting as Financial Advisor for the airline and transaction Investment Agent.
The new capital will be partially used to finance the previously announced acquisition of 73 new aircraft and will cover SAUDIA’s aircraft financing need until mid-2024. The carrier has completed purchase agreements for 20 Airbus A320neos, 15 A321XLRs and 30 A320neos for flyadeal, as well as eight Boeing 787-10 Dreamliners, of which five have been delivered.
Speaking at the signing ceremony, Saudi Arabia’s Minister of Transport, H.E. Engr. Saleh bin Nasser Al Jasser, said,
“This agreement will contribute substantially to the Kingdom’s long-term economic growth and development. Saudi Arabian Airlines Corporation’s fleet expansion will boost tourism and its allied sectors, generate substantial employment opportunities, significantly improve air connectivity, and enhance the flow of foreign investments, in addition to supporting the Kingdom’s efforts to diversify the economy by strengthening the key sectors.
“The robust capacity from our national flag carrier in partnership with the six local banks to conclude the financing structure of this size, for the first time in Saudi Arabia’s aviation history, reinforces the strength of the Saudi banking sector. The corporation will play a key role in contributing to the overall growth of the Saudi economy by attracting more tourists and pilgrims to the Kingdom. The global economy will ultimately recover, and we want to ensure that we are fully-prepared and well-positioned early on to meet the demands of inbound and outbound passengers by serving them to the highest standards.”
Also commenting on the historic financing agreement, Saudi Arabian Airlines’ Director General, H.E. Engr. Ibrahim bin Abdulrahman Al-Omar, added,
“We are proud to partner with the top financial institutions in Saudi Arabia to lead the aviation sector’s recovery amid uncertain market conditions. This financing agreement demonstrates our resilience as well as our determination to capture opportunities in securing competitive funding to enable our fleet expansion with a range of new and modern aircraft that will enable us to meet the national aviation requirements in the years to come.”
Despite the challenging market conditions for the airline industry, SAUDIA received financing bids totaling over SAR 18 billion (US $4.8 billion), demonstrating the market’s confidence in the airline’s strategic long-term plans to deliver growth inline with Saudi Vision 2030. The agreement also underscores the airline’s commitment to promoting the Kingdom’s flourishing tourism industry and the Hajj and Umrah sector and Vision 2030's objective to attract 100 million tourists and 30 million Umrah Pilgrims annually.
Source: Saudi Arabian Airlines