The kingdom announced last year that it would create a second national airline besides Saudia as part of the country’s “Vision 2030” to diversify its economy away from oil. The new airline will be headquartered in the capital, Riyadh, while Saudi Arabian Airlines will be headquartered in the Red Sea city of Jeddah, a transport strategy that calls for two hubs to compete with airlines in the United Arab Emirates and Qatar.
In addition, it is unclear whether Boeing will also be involved in the procurement list for the new airline, which will be named RIA, the sources said. A source familiar with the talks warned that the talks “are not over yet”. It was previously reported that PIF was in talks with Boeing and Airbus to seek an order for about 80 jets, including an outright purchase of nearly 40 and a similar number of purchase options. It is reported that Saudi demand includes single-aisle aircraft and larger wide-body models capable of long-haul flights. Another source said Saudi Arabia is leaning towards buying the Boeing 787.
Both Airbus and Boeing declined to comment.
Any commercial deal would have to be politically approved and depended on complex engine negotiations, one of the sources said. Two industry sources said the choice of an aircraft supplier was widely seen as politically charged amid rising tensions between Saudi Arabia and the United States.