Saudia Airlines sees no delays to Airbus jet deliveries
By Rachel More
HAMBURG, Germany, July 16 (Reuters) -Saudia Airlines is confident that recently ordered Airbus AIR.PA jets will be delivered on schedule despite recent production delays, a senior airline executive said on Tuesday.
State-owned parent Saudi Group ordered 105 narrow-body Airbus planes in May to be split between Saudia Airlines and its low-cost sister carrier flydeal.
Saudia is due to receive the first aircraft in 2026, with deliveries stretching until 2031, said Saleh Eid, vice-president of fleet management and agreements at Saudia Airlines.
"We are very comfortable with these delivery times," he told Reuters, noting that the airline was still taking delivery of Airbus planes under a previous order.
"We believe that the delivery dates we have got are safe," he said at an event to mark the recent plane order at an Airbus factory in Hamburg.
Airline industry executives have said in recent months they are being notified of further delays amid disruption to supply chains. A decision by Airbus to slow its production ramp-up and cut delivery goals has trimmed expectations for 2024 and beyond.
Eid stressed that airlines depend on aircraft arriving on time to fulfil their network plans.
Delayed deliveries have led to significant compensation and concessions for airlines including freezes in the contractual charges that adjust for inflation, industry sources say.
Eid declined to comment on ongoing talks over a possible follow-up purchase of wide-body jets.
A Saudia Group executive said last month it is in talks with Airbus and Boeing BA.N to increase wide-body capacity as planemakers face constraints in production of smaller jets.
Flyadeal CEO Steven Greenway told Reuters in June it is studying a possible order for between 10 and 20 wide-body jets.
Saudi Arabia is investing billions of dollars to diversify its economy from fossil fuel. Aviation plans include new airlines and potentially a huge international airport as it takes on regional rival and Gulf travel hub, the UAE.
However, some analysts have questioned how the multi-year expansion will be funded. The International Monetary Fund on Tuesday revised downwards Saudi Arabia's economic growth by nearly one percentage point, mainly due to oil production cuts.
Even so, Airbus data issued this week pointed to continued rises in air travel.
"In regions like the Middle East or Asia or Latin America, there is a big growth ongoing. And of course the deal ... with Saudi Arabia is a good example of this," Wouter van Wersch, Airbus Executive Vice President, International, told Reuters.
Saudia already operates narrow-body Airbus aircraft but the order for 105 planes was seen as a significant win in Saudi Arabia, where Boeing has a major presence.
Boeing last year won a major combined order for wide-body 787s from Saudia and a new national carrier, Riyadh Air.
"Our ambition is to be part of the system, to continue to grow together with the country," van Wersch said.
Reporting by Rachel More; Writing by Tim Hepher; Editing by Steohen Coates
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