Saudi Arabia makes historic purchase of Boeing aircraft

Boeing completed two deals with Saudi Arabia to manufacture up to 121 Boeing 787 Dreamliner aircraft equipped with General Electric’s most advanced GEnx engines, the US announced on Tuesday.

The deal was announced just days after Iran and Saudi Arabia resumed full diplomatic relations after an eight-year escalation of conflict in the broader Sunni and Shi’ite divide, dating back over a millennia.

What did the US say?

To address concerns that the recent deal with the Islamic Republic moved Riyadh away from Washington’s corner, the White House said, “These landmark deals with Saudi Arabia – one to anchor a new airline and another to expand an existing fleet – are valued at nearly $37 billion. In a period of weeks, Boeing closed two of its largest transactions in the history of the company.”

Former national security council chief and one of a group of co-Abraham Accords architects, Meir Ben-Shabbat, told The Jerusalem Post that “the Saudis cannot just pull on the US. With this deal, the Saudis could carry out moves” to alternately pressure each side.

“The signed deal with Boeing addresses this. In fact, against the background of becoming closer to Iran and China, the Saudis can perform more of a balancing act – though this doesn’t mean that the [Iran] deal is not problematic.”

The Saudi-Boeing deal is not surprising, he added.

“The Saudis don’t want to completely lose their connections to the US. They do not want to invest only in one power, but hedge their bets.”

He noted that “the deal with Boeing did not come together in the last few days. It took time and started before the deal with Iran. Now though, the Saudis can balance it out with the Iran deal.”

"The most recent deals with Saudi Arabia alone support more than 140,000 American jobs, many of which do not require a four-year college degree.  We are particularly pleased that Boeing was able to finally conclude these deals with Saudi Arabia after years of discussions, and intensive negotiations over recent months," said the US, in what seemed to be a backhanded reference to the recent deal with Iran.

The announcement is part and parcel of the efforts to balance between the US, Iran and other Eastern powers, added the former NSC chief.

He said Israel “needs to continue to aspire to more steps in the direction of normalization [with the Saudis], even without a full deal.”

He added that he isn’t sure how the deal will play out.

“There are deep fissures there” with the millennia old Sunni-Shi’ite split. “Israel could still serve as an alternative.”

The White House said that the deal “ensures that Boeing and General Electric will anchor Saudi Arabia’s new international airline together with support for a new international airport. This partnership is another milestone in eight decades of cooperation between Saudi Arabia and American industry.”

It added that it “looks forward to working with Saudi Arabia and all partners in the Middle East to support a more prosperous, secure and integrated region, which ultimately benefits the American people.”

What did Boeing and Riyadh Air say in a statement?

Boeing and Riyadh Air issued a statement saying “Owned by Saudi Arabia’s Public Investment Fund (PIF), Riyadh Air said it will purchase 39 highly efficient 787-9s, with options for an additional 33 787-9s. Based in the capital city, Riyadh Air will play a key role in growing Saudi Arabia’s air transport network.”

The two companies added that “this agreement is part of Saudi Arabia’s wider strategic plan to transform the country into a global aviation hub. In total, Saudi Arabian carriers today announced their intent to purchase up to 121 787 Dreamliners in what will be the fifth-largest commercial order by value in Boeing’s history. This will support the country’s goal of serving 330 million passengers and attracting 100 million visitors annually by 2030.”

Riyadh Air CEO Tony Douglas said “the new airline reflects the ambitious vision of Saudi Arabia to be at the core of shaping the future of global air travel and be a true disrupter in terms of customer experience.”

"Riyadh Air's commitment to its customers will see the integration of digital innovation and authentic Saudi hospitality to deliver a seamless travel experience. By positioning the airline as both a global connector and a vehicle to drive tourist and business travel to Saudi Arabia, our new 787-9 airplanes will serve as a foundation for our worldwide operations, as we build the wider network and connect our guests to Saudi Arabia and many destinations around the world," Douglas said.

Stan Deal, president and CEO of Boeing Commercial Airplanes, said “this is a significant order that will support Riyadh Air’s commitment to deliver a world-class travel experience, while supporting American aerospace manufacturing jobs at Boeing and across our supply chain. Our agreement builds on that longstanding partnership and will further expand access to safe and sustainable commercial air travel for decades more.”

The 787-9 provides the longest range of the 787 family of airplanes, flying approximately 300 passengers 7,565 nautical miles (14,010 km.), with additional cargo capacity.

“The 787 family is delivering unmatched fuel efficiency to airline operators around the world, reducing fuel use and emissions by 25% compared to airplanes they replace,” the statement on behalf of the two companies adds.

In parallel, Boeing and Saudi Arabian Airlines (SAUDIA) announced that the national flag carrier will grow its long-haul fleet with the selection of up to 49 787 Dreamliners. SAUDIA is set to purchase 39 787s, with a further 10 options, utilizing the outstanding efficiency, range and flexibility of the Dreamliner to sustainably grow its global operation. The agreement will include both 787-9 and 787-10 models.

His Excellency Engr. Ibrahim Al-Omar, director-general of SAUDIA Group, said that “the agreement with Boeing delivers on this commitment and the newly added aircraft will further enable SAUDIA to fulfill its strategic objective of bringing the world to the kingdom”.

SAUDIA currently operates more than 50 Boeing airplanes on its long-haul network, including the 777-300ER (Extended Range) and 787-9 and 787-10 Dreamliner. “The additional 787s complement SAUDIA’s existing fleet, enabling it to effectively harness their value,” reads the statement.

Deal added, “Adding to its 787 Dreamliner fleet will enable SAUDIA to expand its long-haul service with outstanding range, capacity and efficiency.”