Saudia secures $1.9bn loan to fund planes
Riyadh, February 20, 2014
Saudi Arabian Airlines (Saudia) has secured a loan worth 7 billion riyals ($1.9 billion) from a consortium of banks to fund its plane deliveries and growth plans, the company's director-general said.
The loan, which will finance the delivery of the next 17 aircraft on order for the carrier, is with a group of local and international banks led by Saudi Arabia's Samba Financial Group, Khalid bin Abdullah Al-Molhem said on the sidelines of a conference in Dubai late on Wednesday. He did not reveal the tenor or the terms of the loan.
Saudia is in competition with other state-backed regional aviation giants such as Emirates and Qatar Airways, who are aggressively expanding their fleets and global reach.
The carrier is conducting an initial public offer of shares in its cargo unit this year, the second of six units including catering, ground services, maintenance, airlines and flight academy to be listed following Saudia's decision in 2006 to privatise them.
"Our aim is to moderninse the fleet and expand international operations," said Al-Molhem.
The carrier has ordered 90 new jets from plane makers Boeing and Airbus, of which 72 have been delivered so far. The remaining will be delivered over the next three years.
It is also in talks with the manufacturers on a requirement for a further 50 planes.
Saudi Arabia opened its domestic aviation market to competition in 2012 as part of reforms aimed at improving service levels and accessibility. Qatar Airways-owned Al Maha Airlines and Saudi Gulf are expected to launch domestic operations in Saudi Arabia this year -Reuters