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Saudia in talks with Airbus and Boeing over plane orders

Saudia CEO Ibrahim Koshy says the talks are for aircraft for both airlines as they have the same shareholder

Saudi Arabian Airlines (Saudia) is in talks with planemakers Airbus SE and Boeing Co. on orders for itself and a new carrier the kingdom plans to launch, the state-owned airline’s chief executive said on Tuesday.

The talks are for aircraft for both airlines as they have the “same shareholder”, Ibrahim Koshy told Reuters on the sidelines of Saudi Arabia’s FII investment conference.

Reuters reported on Monday that Saudi Arabia’s wealth fund was in advanced negotiations to order almost 40 A350s from Airbus, with Boeing also lobbying for a slice of the kingdom’s aviation expansion despite a chill in US-Saudi relations.

Several analysts believe an order could be split between the two plane giants.

Asked on Tuesday whether potential orders were for the new airline or Saudia, Koshy said “both”.

Provisionally named RIA, the new airline will be based in the capital Riyadh, while state airline Saudia will be based out of Jeddah under a transportation strategy that calls for the establishment of two hubs to rival United Arab Emirates and Qatari carriers.

A person familiar with the plans has said the sovereign Public Investment Fund (PIF) has allocated hefty funds to create an ecosystem of cargo and passenger airlines, repair companies and airports.

The PIF is looking at buying and leasing options for a fleet that could ultimately reach 200 airplanes, the person said.

Negotiations for an airplane purchase have been under way for months.

In November last year, Koshy told Reuters that Saudia was in talks with Airbus and Boeing for a wide-body jet order, with a decision expected some time in 2022. In May, sources said the talks were aiming at a significant order.

A final decision depends on political approval at the highest level, according to industry sources.

State-owned Saudia is planning its own rapid expansion over the next eight years as part of a government strategy to transform the kingdom into a transport hub and promote tourism.