It’s been another big week for the airline looking to “transform the future of travel“, including a significant narrow body order with Airbus, a tease of their digital booking experience plus a major financing deal with multiple Saudi financial institutions.
Cash or Credit?
Riyadh Air has secured a landmark SAR 5 billion (around US 1.33 billion) Islamic Revolving Credit Facility, which comprises an initial SAR 3 billion tranche and a SAR 2 billion accordion option.
This financing milestone underscores the airline’s robust market positioning and readiness to launch operations, boosted by the sheer confidence of eight leading financial institutions in the Kingdom and the GCC region.
The one-year, unsecured facility was strategically arranged with a consortium of eight banks, including Arab National Bank, Al Rajhi Bank, Gulf International Bank, Emirates NBD, Riyad Bank, Banque Saudi Fransi, Saudi Awwal Bank, and Saudi National Bank.
The signing ceremony took place during the 8th edition of the Future Investment Initiative (FII) in Riyadh.
Previous read: Who do you think you are? Part 1: Riyadh Air, Etihad Airways and Gulf Air Group
The financing solution demonstrates the banking community’s support for Riyadh Air’s ambitious growth strategy. ahead of its operational launch in 2025. The facility’s flexible structure will enable the airline to manage aircraft acquisitions and short-term working capital requirements.
Adam Boukadida, Chief Financial Officer of Riyadh Air, noted, “Securing this Revolving credit facility is a pivotal moment for Riyadh Air as we gear up for our launch. The confidence shown by our banking partners in this facility underscores their belief in our business model and our vision to redefine air travel.
“We have always strongly maintained that Riyadh Air will be a commercially sustainable business, and this is reflected in their steadfast support for our plans. This financing not only strengthens our liquidity but also aligns with our strategy to maintain financial discipline as we approach our operational debut.”
Read more: Riyadh Air signs off on major ground handling deal and electric coaches
Fleet expansion
Meanwhile, ahead of its operational launch in 2025 the airline has entered into an agreement to purchase 60 Airbus A321neo aircraft. This new deal brings Riyadh Air’s total aircraft orders to a total of 132.
The Airbus A321neo, known for its sustainability and efficiency, will complement Riyadh Air’s existing wide-body aircraft order. This move enables the airline to operate a diverse fleet for its growing international network.
According to Riyadh Air CEO Tony Douglas, this deal will also enable the airline to operate one of the most sustainable fleets globally, supporting the Kingdom’s net-zero emissions goals.
His Excellency Yasir Al-Rumayyan, PIF Governor and Chairman of Riyadh Air, expressed his pleasure with the incredible milestone, highlighting the airline’s commitment to building a strong global network, while Christian Scherer, CEO of Commercial Aircraft at Airbus, welcomed Riyadh Air as a new customer, emphasising the efficiency and passenger comfort affforded by the A321neo aircraft.
Digital native
Riyadh Air CEO, Tony Douglas also recently promised an Apple-esque launch announcement at FII – an opportunity for the digital native airline to share details of the transformative online booking experience. While full details are yet to be received, a new social marketing campaign promised a new era in booking flow, highlighting effortless flexibility as the new norm. The RX app promises to allow multiple experiences to be booked to a single destination, including flights, stays, cars, events, attractions. We’ll share further details of their state of the art technology as they get released.
