Pointers at Glance
- Industry sources said that Saudi Arabia is in advanced negotiations to order nearly 40 A350 jets from Airbus (AIR.PA) as part of a broader, multi-billion-dollar drive to launch a new airline and protest heavyweight carriers in the Gulf.
- Sources said there is no guarantee of the airbus deal. Still, if confirmed, the purchase by the sovereign Public Investment Fund (PIF) could be announced at the start of this week when Riyadh hosts a major forum, the Future Investment Initiative (FII).
The sources also said that the end decision on the mentioned deal, worth approximately $12 billion at list prices, depends on political approval at the highest level, with Boeing also urging for a slice of the extension despite a chill in US-Saudi relations.
A source familiar with the negotiation for the new airline, provisionally named “RIA,” alerted that it was “not over yet.” Neither France-based Airbus nor Boeing (BA.N) had any issues. Public Investment Fund (PIF) did not respond to a request for the comment.
Industry sources said Boeing remained confident of winning at least part of a total requirement for around 68-75 jets through its Boeing 787 Dreamliner, already in use at state-owned Saudia.
Reports have said that the new airline may also require smaller narrow-body jets. It was reported in August that Saudi Arabia was discussing an important and major order for wide-body jets.
Bloomberg News reported on Sunday that any deal might involve up to 80 aircraft. The strategically important potential deal is one of the economic topics in focus ahead of the FII forum, taking place under the shadow of tensions between Washington and Riyadh.
The FII is a showcase for Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify from oil by fostering new industries that create jobs and lure foreign capital.