Saudia plans first bond issue to fund fleet expansion

Saudia

State-owned Saudi Arabian Airlines (Saudia) is planning its first bond issuance as part of a funding plan to drive its expansion strategy, according to a media report.

The airline is evaluating options, Ibrahim Alomar, director general of Saudia, told Bloomberg.

He added that the proposed bond size has not been finalised.

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Saudia aims to increase its fleet from 177 aircraft to 317 to serve 30 million religious tourists by 2030 as well as attract 70 million foreign visitors. 

Alomar said new aircraft orders are possible next year, adding that financing is in place to cover its needs until mid-2024.

Saudia, which currently operates 142 aircraft, announced an order with Boeing for 39 fuel-efficient 787s in March with options for 10 more aircraft. It is part of the company’s plan to grow its long-haul fleet with up to 49 787 Dreamliners.

Saudi Arabia in March announced the launch of two new airlines. Riyadh Air is expected to create more than 200,000 direct and indirect jobs and add $20 billion to the kingdom’s non-oil economy. Neom Airlines will solely serve the $500 billion Neom city in the northwest of the kingdom.

Saudia and Riyadh Air will operate independently but may collaborate in maintenance and other services, Alomar told the news agency.