Saudi Arabia is in advanced negotiations to order nearly 40 A350 aircraft from European manufacturer Airbus as part of its strategic efforts to launch a new airline and challenge the heavyweights in the Persian Gulf, according to industry sources.
If confirmed, the purchase by the sovereign Public Investment Fund (PIF), worth $12 billion at list prices, could be announced as early as this week, when Riyadh hosts a major forum, the Future Investment Initiative (FII), the sources said.
It was unclear whether Boeing would also take part of the significant stake for the new airline, to be called RIA, the sources said.
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A source familiar with the matter cautioned that “negotiations are not yet over.”
PIF has been negotiating the purchase of some 75 aircraft and a source indicated that the kingdom was leaning towards the Boeing 787. Reports have said the airline may also need narrow-body aircraft, Reuters reported.
The new airline will be based in the capital, Riyadh, while state-owned Saudia will be based in the Red Sea city of Jeddah, as part of a transport strategy that calls for the creation of two hubs to compete with airlines from the United Arab Emirates and Qatar.
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