The order for Boeing 787s will be divided between Saudi Arabia’s flag carrier, Saudia, and a planned new airline called Riyadh Air, which Saudi officials announced over the weekend.
At list prices, the combined deal would be worth about $37 billion if the options are exercised, but airlines routinely get deep discounts. Terms of the deal were not disclosed.
Boeing had been talking to the Saudis about an order for three years, according to two senior U.S. administration officials, who spoke on condition of anonymity because the deal had not been publicly announced. The officials said President Joe Biden did not directly lobby for the order when he met Saudi Crown Prince Mohammed bin Salman last summer, but top aides made a pitch to Saudi government officials on Boeing’s behalf.
“We are particularly pleased that Boeing was able to finally conclude these deals with Saudi Arabia after years of discussions, and intensive negotiations over recent months,” said White House press secretary Karine Jean-Pierre. She called the announcement “another milestone in eight decades of cooperation between Saudi Arabia and American industry.”
The Saudi deals will support about 1 million jobs in 44 states across the U.S. supply chain, including 150,000 new manufacturing jobs, according to administration officials.
The planes will be powered by engines from General Electric Co. Relatively high oil prices have boosted Saudi Arabia’s economy and government, making it easier for the kingdom to close a multi-billion-dollar jet order.
Riyadh Air, backed by the Saudi sovereign-wealth fund, is part of a plan to make the kingdom a global aviation hub and attract 100 million annual visitors by 2030.
“The new airline reflects the ambitious vision of Saudi Arabia to be at the core of shaping the future of global air travel and be a true disrupter in terms of customer experience,” said the planned airline’s CEO, Tony Douglas.
At the same time, strong demand for travel is boosting demand for jets made by Boeing and Airbus.
The sale comes a month after Air India announced it agreed to buy 220 planes from Boeing and 250 from European aircraft maker Airbus. Both the Air India and combined Saudi Arabian order rank among Boeing’s five largest.
Boeing’s history with Saudi Arabia goes back to early 1945, when President Franklin D. Roosevelt presented Abdulaziz al Saud- the founder of modern Saudi Arabia – with a DC-3 made by Douglas Aircraft Co., one of the forerunners of current-day Boeing.
The relationship has stood through Democratic and Republican administrations ever since. President Donald Trump signed defense and commercial deals for Boeing during a 2017 trip to the kingdom. The crown prince toured a Boeing plant in the Seattle area the following year and signed a memorandum of understanding for a joint venture maintaining military aircraft in the kingdom.
