After a slow month of orders, Boeing announced on Tuesday that it has received commitments from two Saudi Arabian airlines to build up to 121 wide-body 787 Dreamliner aircraft.
Crown Prince Mohammed bin Salman revealed over the weekend that the new Saudi carrier Riyadh Air will be receiving 39 of the aircraft, with the option to acquire 33 more. State-owned Saudia, formerly known as Saudi Arabian Airlines, would purchase 39 aircraft, with an extra 10 aircraft options, according to Boeing.
The deal is valued at over $35 billion at list costs, despite the fact that airlines normally receive discounts on brand-new aircraft.
The agreement, along with Boeing's earlier-year sale of 200 aircraft to Air India, was welcomed by the White House.
Combined, these agreements will sustain more than one million American jobs in the aerospace supply chain spread over 44 states, according to a statement from White House press secretary Karine Jean-Pierre. In the eight decades of cooperation between Saudi Arabia and American business, this alliance marks another significant turning point.
By 2030, Riyadh Air, which is owned by the Saudi government's sovereign wealth fund, will offer services to more than 100 international locations, according to the Saudi state news agency.
Tony Douglas, a former CEO of Etihad, will lead the airline.
The statement is the most recent step in Saudi Arabia's effort to expand its economy beyond oil. The nation has made significant investments in its aerospace and tourism sectors as part of that push. According to the Saudi News Agency, the new carrier is anticipated to boost non-oil gross domestic product development by $20 billion.
The relationship between Saudia and Riyadh Air was not immediately obvious.
Saudia, a member of the SkyTeam alliance, has historically played a less significant "transit" role than other Persian Gulf carriers, which focus on carrying passengers throughout the world via their strategically located hubs.
The airline has instead concentrated more on transporting travelers whose point of origin or destination is Saudi Arabia.
According to the announcement, Riyadh would put more of an emphasis on linking distant international locations for transit travelers while also capturing demand to and from Saudi Arabia—emphasizing the region's advantageous location.
According to the Saudi News Agency, the new national carrier will take advantage of Saudi Arabia's advantageous geographic location between the three continents of Asia, Africa, and Europe to make Riyadh a gateway to the globe and a major hub for travel, trade, and tourism.
Together with the current Gulf carriers — Emirates, Etihad, and Qatar — and Turkish Airlines, such a move would create a more competitive environment for transit customers. Turkish has recently worked to establish its hub in Istanbul, which is far closer to Europe than the Persian Gulf, as a major global carrier.
According to reports, the two Saudi airlines spoke with Airbus and Boeing.
Airbus suffered a setback as a result of the subsequent all-Boeing deal, as both aircraft manufacturers battle with interrupted supply chains in an effort to meet the growing demand for wide-body aircraft.
After stopping them last month due to what it described as a data analysis issue, Boeing is anticipated to restart delivery of finished 787 aircraft in the upcoming days. Following last week's approval of Boeing's revised analysis, the Federal Aviation Agency gave the go-ahead for the deliveries to resume.
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