Saudi’s flynas to buy Airbus aircraft worth $8.6bn

Saudi Arabia’s flynas has struck a deal with Airbus to buy planes worth $8.6bn, Kingdom Holding, which owns 34.1 per cent of the budget carrier, said on Wednesday.

Airbus finalised a deal to sell more than 60 jets to flynas, industry sources told Reuters on Tuesday, with one adding that the order was expected to cover more than 60 A320neo narrow body planes.

Kingdom Holding, the investment firm owned by billionaire Prince Alwaleed bin Talal, did not specify how many or which model of aircraft flynas had purchased, but it added that the first batch will be received early in 2018.

Flynas, which launched as Nas Air in 2007 and first turned a profit in 2015, has been negotiating an order for at least 60 narrow body jets with Airbus and rival planemaker Boeing since as early as April 2016.

The airline’s CEO Paul Byrne said on April 27 whichever manufacturer it chose would over time become the sole supplier.

The order, which would replace and expand a fleet of leased A320s, would give flynas one of the largest Middle East low cost fleets after state-owned flydubai, which operate 57 Boeing 737-800s and has more than 100 scheduled for delivery by 2023.

Flynas is facing increasing competition domestically, where it conducts the majority of its operations. Start-up SaudiGulf Airlines and Saudi-owned, Egypt-based Nesma airline were both granted domestic operating licences in 2016, while state-owned Saudi Arabian Airlines has announced plans for its own budget carrier, Flyadeal, to launch in mid-2017 with a target of 50 jets by 2020.

Qatar Airways-owned Al Maha is waiting for a domestic Saudi operating license.

Saudi Arabia wants to expand its aviation and tourism sectors following the success of its Gulf neighbours Qatar and the United Arab Emirates. It plans to encourage non-religious tourism as part of major national reforms aimed at moving the country’s economy away from oil dependence.