November 14, 2018 / 10:40 AM / a month ago

Saudi's flyadeal to pick Airbus or Boeing jets by end of month

DUBAI (Reuters) - Saudi Arabian budget airline flyadeal aims to decide whether to order Airbus (AIR.PA) or Boeing (BA.N) narrow-body jets by the end of this month, its chief executive said on Wednesday.

FILE PHOTO - An Airbus A320neo aircraft and a Bombardier CSeries aircraft are pictured during a news conference to announce a partnership between Airbus and Bombardier on the C Series aircraft programme, in Colomiers near Toulouse, France, October 17, 2017. REUTERS/Regis Duvignau

Flyadeal, a subsidiary of state-owned Saudi Arabian Airlines, had been due to decide on the order for 30 Airbus A320neos or Boeing 737 MAXs in the second quarter but held off to further assess the performance of the revamped models.

“We want some evidence because we’re committing a huge chunk of capital,” Con Korfiatis told Reuters at a Dubai conference, adding that the planemakers had competed “very vigorously”.

Flyadeal is a pure low cost airline, with passengers charged for meals and checked luggage, a model that has so far not had major success in the Middle East beyond United Arab Emirates-headquartered Air Arabia AIRA.DU.

The order for the planes, which are the latest versions of world’s most used jets and typically employed for short to medium haul flights, would be worth more than $3 billion at current list prices, although industry sources say discounts of around 50 percent are common on such large orders.

Although the world’s two largest planemakers say they are mostly sold out of the jets until 2024, the order will give flyadeal a pipeline allowing it to plan for long-term growth.

The airline, which plans to add around 10 aircraft a year to its fleet from 2020, will next year start leasing the model of jet it orders until it receives its first aircraft from the production line, Korfiatis said.

Flyadeal operates a fleet of eight leased Airbus A320ceos and will add another three by early January 2019, allowing it to expand from 10 to 14 domestic destinations.

The airline, which launched in September 2017, has carried more than 2 million passengers so far and expects to carry more than 3.5 million in 2019, Korfiatis said.

It is also planning to launch its first international flight next year which will likely be to Egypt, Turkey, or to other Gulf Arab countries.

Reporting by Alexander Cornwell; Editing by Alexander Smith

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