Monday, January 16, 2017

Flynas orders 80 A320neos, announces share offering

Saudi Arabian hybrid carrier flynas has ordered 80 Airbus A320neo family aircraft and taken purchase rights on a further 40. At list prices, the order is worth $8.6 billion.

The 80 firm orders will be delivered between 2018-2026.

Making the announcement Jan. 16, the airline also revealed it is planning an IPO.

“We also look forward to being the first airline in Saudi Arabia to be successfully listed in the Saudi stock exchange,” chairman of flynas’ parent company, NAS Holding Group, Ayed Al Jeaid, said.

“We have operated exceptionally well with our existing Airbus A320 fleet, which has allowed us to maintain high performance standards in operations and passenger experience,” NAS Holding Group CEO Bander Al Mohanna added.

“We have an ambitious growth vision and the new A320neo order will further support our plans to be a leading low-cost carrier with the most advanced and efficient technology to strengthen our offerings within and outside of Saudi Arabia.”

The Airbus order, which had been expected, will enable a major expansion of flynas’s activities. Its current fleet consists of 26 A320s, which will be replaced by the new aircraft as they reach the end of their leases.

“In effect, the entire [current] fleet will no longer be with us in the next five years, based on their lease dates,” flynas CEO Paul Byrne said.

Talking exclusively to ATW, he said that it was possible that various members of the A320neo family could be chosen: “The fact that there’s a family gives us that option.

“We’re operating two A319s from Abha [southwest Saudi Arabia] at the moment. It’s a Public Service Obligation (PSO) undertaking that we expect to encompass 10 routes and the A319 is the perfect aircraft for that.” The two A319s are leased directly from lessor AerCap. The airline is also wet-leasing two Boeing 737-800s from Turkish operator Pegasus Airlines.

The Riyadh-based airline operates primarily domestic services within Saudi Arabia, but also flies to several destinations in Egypt and the Gulf, as well as in Jordan and Turkey.

Competition in the Saudi domestic market is growing as new entrants such as SaudiGulf Airlines and Nesma Airlines start services, with flag-carrier Saudia and several Gulf airlines also stepping up frequencies.

Byrne sees further concentration on the domestic market: “We’re covering a little over 30% of the airports in the Kingdom at the moment. There really is great demand in the country and the region.

“We see expansion in the Kingdom itself, particularly in religious tourism and we need to take advantage of that.”

The new order also opens up the possibility of expanding into the Indian sub-continent, said Byrne. There is a huge flow of workers between the sub-continent and the Gulf.

He added that he understood the IPO was planned for later this year. Details “are above my pay grade, but my understanding of Saudi law is that you must offer at least 30% [of the shares].”

Alan Dron - ATWOnline News)

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