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Startup airline Riyadh Air secures $1.3bn credit facility

Riyadh Air credit Riyadh Air
Riyadh Air revealed a new $1.3bn credit facility at the same time as it signed an order for 60 narrow-body Airbus A321neo aircraft
  • Agreement with eight banks
  • 60 Airbus A321neo ordered
  • Drive for booking platform

Riyadh Air, the Saudi airline that is due to start operations next year, signed a SAR5 billion ($1.3 billion) credit facility with a syndicate of banks on Wednesday, as it announced an order for 60 more aircraft.

The kingdom’s second flag carrier, owned by the PIF sovereign wealth fund, has closed an inaugural Islamic revolving credit facility worth SAR3 billion, which includes an option for an additional SAR2 billion.

The agreement was secured with eight financial institutions: Arab National Bank, Al Rajhi Bank, Gulf International Bank, Emirates NBD, Riyad Bank, Banque Saudi Fransi, Saudi Awwal Bank and Saudi National Bank.

Adam Boukadida, Riyadh Air’s CFO, said: “This financing not only strengthens our liquidity but also aligns with our strategy to maintain financial discipline as we approach our operational debut.”

The airline is ramping up its fleet of aircraft as it prepares to start operations in the summer of 2025. On Wednesday it signed an order for 60 narrow-body Airbus A321neo aircraft, during the eighth edition of the Future Investment Initiative (FII) conference in Riyadh.

Although the agreement’s value was not disclosed, the latest order is estimated at about $4 billion after typical discounts, according to Reuters

The deal brings to 132 the total number of jets ordered by the company so far.

Last year, the airline ordered 39 Boeing 787 Dreamliners, with options for 33 more.

The Saudi startup plans to start talks with Airbus and Boeing for an order of A350-1000 or 777X wide-body jets within two months, according to Reuters.

Riyadh Air will also need the credit facility to develop what it considers a one-stop digital platform for customers to plan and manage entire trips, competing with global travel giants.

The platform, putting Riyadh Air in direct competition with companies such as Booking.com and Expedia, will enable passengers to book not only flights but also accommodation, car rentals, AI-generated itineraries and tickets to attractions and concerts.

Tony Douglas, CEO of Riyadh Air, said the airline was aiming to be a “digitally-led business that enables travel, not to be confused with a regular or conventional airline”.

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