November 21, 2017 / 4:13 PM / a year ago

INTERVIEW-Saudia targets earlier return to profit, possible wide-body jet order

* On track to now return to profitability in 2019

* Airline to carry 32 mln passengers in 2017

* Could order wide-body jets in 2018

* Airbus or Boeing narrow-body jet order to be decided by Q218

By Alexander Cornwell

SHARJAH, United Arab Emirates, Nov 21 (Reuters) - Saudi Arabian Airlines is on track to return to full-year profitability in 2019, 12 months earlier than planned, and could order wide-body jets next year, its most senior executive said on Tuesday.

The state-owned carrier, also known as Saudia, launched a restructuring programme in 2015 that involves selling stakes in some of its business units, with the goal of returning to the black by 2020.

“This year has been an excellent year for us,” the airline’s director-general, Saleh bin Nasser al-Jasser, said in an interview during a visit to the United Arab Emirates.

The Jeddah-based airline, which plans to list on the stock exchange eventually, made money in the third quarter of this year, after just one profitable month in 2016. It aims to be profitable in one half of 2018, and expects to record its first annual profit in several years in 2019, Jasser said.

Saudia, one of the Middle East’s oldest airlines, says it has been able to make its business more efficient while expanding its fleet and route network. It expects to carry over 32 million passengers this year, up from around 29 million in 2016.

Seasonal routes to Europe and Turkey will be added next summer and a new wide-body jet order will be considered in 2018, Jasser said.

One source of increased demand for the airline is Muslim pilgrims; the Saudi government aims to boost the number of people coming from abroad for the Umra pilgrimage to 15 million in 2020 from 6 million in 2015.

Saudia has 144 commercial passenger jets in its main fleet and plans to increase that to as many as 200 by 2020. Meanwhile, the airline’s fully owned Jeddah-based low-cost subsidiary, flyadeal, started flights in September.

Saudia and flyadeal will list shares on the stock market as part of a joint initial public offer some time after 2020, Jasser said. Under sweeping economic reforms, the Saudi government aims to raise $300 billion by selling stakes in state companies and other assets in coming years.

Jasser said he expects Airbus and Boeing to submit proposals for a 30-jet narrow body order for flyadeal by the end of this year, and that a decision on the order would be made by the second quarter of 2018.

Saudia is in the “advanced stages” of selling 75 percent of its medical services business through a private placement, Jasser said. Jadwa Investment is advising on the sale of the unit, Saudia Medical Services.

Saudia plans to float a 30 percent stake in its cargo unit on the stock market, possibly next year, and part of its flight training business will be sold in a private placement, Jasser added. (Reporting by Alexander Cornwell; Editing by Andrew Torchia and Susan Fenton)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below