Saudia raises $3bn to fund aircraft orders. Credit: Eric Johnston via Flickr.

State-owned carrier Saudi Arabian Airlines has signed a $3bn (SAR11.2bn) financing agreement, the largest such deal in the country’s aviation sector history.

The deal was signed by Saudi Arabian Airlines director general Ibrahim bin Abdulrahman Al-Omar and representatives of Al Rajhi Bank, Saudi British Bank (SABB), Arab National Bank (ANB), Samba, Bank AlJazira, and Bank Albilad.

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The agreement will support the company’s fleet expansion. A portion of the funding will finance the previously announced acquisition of 73 new aircraft.

It will cover the carrier’s aircraft financing requirements until mid-2024.

The flag carrier concluded agreements Airbus and Boeing to procure 20 A321neo, 15 A321XLR, 30 A320neo for flyadeal, and eight Boeing 787-10.

Boeing has already delivered five Boeing 787-10 aircraft into the corporation’s fleet.

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Saudi Arabia Transport Minister Saleh bin Nasser Al Jasser said: “This agreement will contribute substantially to the Kingdom’s long-term economic growth and development. Saudi Arabian Airlines Corporation’s fleet expansion will boost tourism and its allied sectors, generate substantial employment opportunities, significantly improve air connectivity, and enhance the flow of foreign investments, in addition to supporting the Kingdom’s efforts to diversify the economy by strengthening the key sectors.

“The robust capacity from our national flag carrier in partnership with the six local banks to conclude the financing structure of this size, for the first time in Saudi Arabia’s aviation history, reinforces the strength of the Saudi banking sector.”

HSBC Saudi served as the financial adviser for Saudi Arabian Airlines and is the appointed investment agent in the transaction.

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