Largest deal of its kind in Saudi Arabian aviation sector's history
Under the patronage of H.E. Minister of Transport, Chairman of the Saudi Arabian Airlines Corporation, Engr. Saleh bin Nasser Al Jasser, Saudi Arabian Airlines Corporation has signed a major financing agreement worth $3 billion.
The deal is the largest of its kind in Saudi Arabia’s aviation sector history.
The agreement, which covers aircraft financing requirements, was signed in the presence of the Minister of Transport, by the Director General of Saudi Arabian Airlines Corporation H.E. Engr. Ibrahim bin Abdulrahman Al-Omar and the representatives of the six Saudi banks.
The banks include Al Rajhi Bank, Saudi British Bank (SABB), Arab National Bank (ANB), Samba, Bank AlJazira, and Bank Albilad. HSBC Saudi acted as the Financial Advisor for Saudi Arabian Airlines and is the appointed Investment Agent in the transaction.
The agreement aims to partially finance the acquisition of 73 new aircraft (previously announced), covering the corporation’s aircraft financing requirements to mid-2024.
Saudi Arabian Airlines Corporation completed the purchase agreements for Airbus and Boeing aircraft, including 20 A321neo, 15 A321XLR, as well as 30 A320neo for flyadeal, and eight Boeing 787-10.
Of these, five Boeing 787-10 aircraft have been inducted into the corporation’s fleet so far.
Speaking at the signing ceremony, Minister of Transport, H.E. Engr. Saleh bin Nasser Al Jasser said that the occasion marked a major milestone for Saudi Arabia’s aviation sector.
H.E. Engr. Al-Jasser said: “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."
Though the airline industry has been going through a challenging phase in 2020 and 2021, the total bids received for this financing exceeded $4.8 billion.
The agreement underscores Saudi Arabian Airlines Corporation’s commitment to actively promoting the Kingdom’s flourishing tourism industry and the Hajj and Umrah sector in line with the Vision 2030 objectives to attract 100 million tourists and 30 million Umrah pilgrims annually.
Even as several international airline companies were shrinking their businesses in the past 18 months, Saudi Arabian Airlines Corporation continued to focus on improving its facilities with the aim of capturing a sizeable market share when the market rebounds.