Boeing Dreamliner deal aimed at boosting Saudi travel

(FILES) In this file photo taken on December 13, 2022, the exterior of a 787 Dreamliner at the Boeing manufacturing facility in North Charleston, South Carolina.(Photo by Logan Cyrus / AFP) (AFP)
(FILES) In this file photo taken on December 13, 2022, the exterior of a 787 Dreamliner at the Boeing manufacturing facility in North Charleston, South Carolina.(Photo by Logan Cyrus / AFP) (AFP)

Summary

  • US aircraft maker announces deal with two Saudi Arabian airlines to buy dozens of 787 Dreamliners

Two Saudi Arabian airlines said they would buy almost 80 Boeing Co. 787 Dreamliners, part of a broader plan to boost travel to the oil-rich kingdom.

U.S. administration officials said the deal announced Tuesday was worth a combined $37 billion and included options to take the sale up to 121 aircraft. The jets would be powered by U.S.-made General Electric Co. engines.

The orders, earlier reported by The Wall Street Journal, are split between a new government-backed startup airline, Riyadh Air, and Saudi Arabian Airlines, or Saudia, the country’s existing flag carrier. They are targeting a nascent tourism market and the international traffic handled largely by other carriers in the Gulf.

The 39 Dreamliners destined for Riyadh Air would make it one of the largest-ever airline startups, with options to add 33 more of the wide-body jets. Saudia is taking 39 Dreamliners in a confirmed order, as well as options to buy 10 more.

Riyadh Air Chief Executive Tony Douglas said the Dreamliners will serve as the foundation of the new carrier’s operations as it expands its network and connects customers to Saudi Arabia with other global destinations.

Riyadh Air was unveiled last weekend by the Saudi sovereign-wealth fund. Saudia, the country’s largest airline with a fleet of more than 140 Boeing and Airbus SE jets, is a member of the SkyTeam alliance that includes Atlanta-based Delta Air Lines Inc.

Boeing and GE’s supply chains cross about 44 U.S. states, and a senior U.S. administration official said the deal would support tens of thousands of new jobs. The White House said Tuesday the Dreamliner deal marked another milestone in eight decades of Saudi Arabia’s work with American industry.

While President Biden didn’t raise the potential deal during his visit to Saudi Arabia in July, several senior U.S. officials discussed it with their Saudi counterparts in the hope that both countries might benefit from its success, the senior administration official said.

Saudi Arabia first disclosed plans in 2021 to create a new international airline, but faces competition from a host of established players.

Dubai-based Emirates Airline, Qatar Airways Ltd., Abu Dhabi’s Etihad Airways and Turkish Airlines have for years taken advantage of the location of their home airports to build themselves into long-haul carriers for travelers between Asia and Europe and onward to and from North America.

Dubai and Qatar have also used their airlines to help turn their small, desert emirates into world-class tourism hubs. The Saudi government has earmarked $1 trillion over the next decade to turn the kingdom into a mass-market tourism destination, after many years of self-imposed isolation.

—Vivian Salama contributed to this article.

Write to Andrew Tangel at andrew.tangel@wsj.com

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