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Order includes 10 A330-900 plus purchase rights for 10

more

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Saudi Arabia aviation market expanding rapidly

(Adds Flynas order, industry context from paragraph 6)

By Tim Hepher

DUBLIN, Jan 14 (Reuters) - Saudi budget airline flyadeal

is finalising a deal to order 10 Airbus A330neo jets in

its first full-blown expansion into wide-body planes as the

kingdom pursues a surge of spending on aviation, industry

sources said on Tuesday.

The low-cost subsidiary of state carrier Saudia is likely to

announce the order for the upgraded A330-900 variant in the

coming weeks after comparing it with Boeing's ( BA ) smaller 787-9, and

the first jets are expected to arrive in 2027, the sources said.

Flyadeal and Airbus declined comment.

An order for 10 A330-900s would be worth some $1.1 billion

after typical discounts, according to estimated delivery prices

from Cirium Ascend. Airbus no longer publishes catalogue prices.

Flyadeal has also negotiated purchase rights for an

additional 10 A330neos, the sources said. A purchase right locks

in prices without specifying delivery dates and can be held for

longer than an option, which includes prices and delivery slots.

The deal comes after Reuters first reported last June that

Jeddah-based flyadeal was studying an order for between 10 and

20 wide-body jets to add new destinations and carry more

passengers into airport slot-constrained markets, such as Dubai.

Saudi Arabia's aviation sector is expanding as the kingdom

invests billions of dollars in its Vision 2030 plan to diversify

its economy away from fossil fuels and boost its private sector.

The latest flyadeal move comes months after competing Saudi

budget carrier Flynas, which is privately owned, placed a

provisional order for 75 Airbus jets including 15 A330neos.

Startup Riyadh Air has ordered both Boeing ( BA ) and Airbus

jets.

Saudi Arabia has the third largest number of jets on order

as a proportion of its existing fleet, behind India and

Malaysia, Jim Morrison, chief risk officer of leasing company

Avolon, told the Airline Economics conference in Dublin.

FLEET PLANS

In service since 2018, the A330neo is an upgraded version of

the 1990s-designed A330. It comes in two versions, of which the

A330-900 is the largest with room for 460 people in the

all-economy high-capacity layout likely to be flown by flyadeal.

The 787-9 can carry 406 people in a dense layout but is

broadly sold out for this decade, conference delegates said.

Flyadeal CEO Steven Greenway, a former senior executive at

Singapore Airlines subsidiary Scoot who was appointed a year

ago, has said flyadeal aims for some 100 jets by 2030.

It has 36 Airbus narrow-body aircraft in its fleet and

another 51 on order via Saudia Group, owner of the Saudia

airline, which ordered 105 Airbus narrow-body jets last May.

In the past two years, it has brought in earlier versions of

A330 and Boeing 777s on "wet lease" with outside crews to serve

seasonal pilgrimage traffic to Saudi Arabia, but the new order

is its first permanent expansion into the industry's large jets.

Low-cost carriers have had mixed success running wide-body

jets, which can have more complex operations than the industry's

workhorse single-aisle jets, such as overnight stops for crew.

Speaking to Reuters last June, Greenway dismissed the

concerns, saying the Atlantic market where some of the earlier

failures happened has unique pressures, while large planes are

more routinely used to fly relatively short distances in Asia.