Saudi airline to buy 15 Embraer jets for $400m

RIYADH — State-owned Saudi Arabian Airlines will buy 15 new aircraft from Brazil’s Embraer in a deal worth $400 million, officials said.

By (Reuters)

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Published: Tue 26 Apr 2005, 10:39 AM

Last updated: Thu 2 Apr 2015, 4:10 PM

The world’s fourth-largest commercial aircraft maker said the first of its 66-seat Embraer 170 aircraft is scheduled for delivery in December.

“Embraer’s new jet will provide Saudi Arabian Airlines with the possibility to expand our domestic and regional aviation activity,” Director General of Saudi Arabian Airlines Khaled Ben-Bakr said in a statement.

The airline, which is slated for privatisation and may lose its monopoly on domestic flights this year, has a fleet of 139 planes. Many are ageing and analysts say its newer, larger planes are unsuited to short-haul internal flights.

Saudi Arabian Airlines will use the Embraer to add frequencies on existing regional and local flights and eventually develop mini-hubs at Hail in northern Saudi Arabia and Abha in the south of the sprawling desert kingdom.

Embraer said the deal has a total value of around $400 million at list price. Saudi Arabian Airlines said the contract included setting up a maintenance centre and the Brazilian aircraft maker will also provide a flight simulator and support equipment for training and maintenance of the new aircraft.

Monday’s deal is the first for Saudi Arabian Airlines since it agreed to buy 61 Boeing and McDonnell Douglas planes -- including 747-400s, 777-200s, MD-11s and MD-90s -- 10 years ago. The planes were delivered between 1997 and 2001.

Five years ago the government launched a study to privatise the airline, but has made little progress since then.

Saudi Arabian Airlines said in spite of increased competition in recent years, it carried a record 15 million passengers last year and made a profit for a third year running. “This led to self-financing the purchase of the new fleet,” it said.

Saudi Arabian Airlines said a signing ceremony will be held in Riyadh on Wednesday. It announced the planned purchase last week but did not indicate which company would be the supplier.

Analysts had said other manufacturers that may have bid for the contract were likely to include Bombardier and ATR, a JV between EADS and Italy’s Finmeccanica.

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