Saudi Arabia's Flyadeal mulls new Airbus jet order amid route expansion plans

Saudi Arabia’s budget airline Flyadeal is considering placing an order for more single-aisle Airbus aircraft and upgrading its existing order of 50 narrow-body jets, as it seeks to grow its international route network.

Flyadeal, an all-Airbus fleet operator, is looking into converting its existing order of A320 Neos and A321 Neos to higher specification aircraft, Steven Greenway, the new boss of the no-frills carrier, told The National.

The potential modification will increase the maximum take-off weight, improve the performance of the jet engines and secure the so-called ETOPS certification that allows for longer flights over water.

It is also considering increasing the number of larger A321 Neos in its existing order to deal with capacity constraints at King Khalid International Airport in Riyadh and limited landing slots at congested airports.

Once it finalises decisions about modifications of its current order book, Flyadeal may place a new order for Airbus A320 Neos and A321 Neos, with a decision to come in the next two months, Mr Greenway said.

The size of the new jet deal will depend on the modifications it will make to the current order.

“There will be announcements to come in the next couple of months with regards to the fleet,” he said in an interview in Dubai.

“There might be another order coming this year, we’re still examining that. Also, we have, within the existing order, the ability to modify the specification of the aircraft. We’re looking at both.”

The higher-specification aircraft and a potential new jet order will help Flyadeal to feed more traffic into the long-haul operations of its sister airline Saudia and to get the longer range it needs to serve more international destinations in South Asia and Europe beyond its predominantly domestic network.

“As we continue to mature the model, we’re finding that we still need more aircraft, we need more capability in terms of range. If you try to go to the subcontinent in the middle of the summer, for example, you need a high-specifications aircraft, which we don’t have,” Mr Greenway said.

“Firstly, we continue to grow and map out what we’re doing vis-a-vis Saudia. And secondly, we’re looking at derivative jets to overcome the shortcomings in particular times of the year for the network that we wish to operate ultimately as we stretch our wings.”

The aircraft payload and range will become increasingly important in its fleet decisions as the airline seeks to expand its international route network.

Steven Greenway was appointed chief executive of Saudi Arabian low-cost airline Flyadeal in January 2024. Photo: Flyadeal.

Established in September 2017, Flyadeal plans to triple its fleet size to 100 aircraft, from 32 currently, in the next five years.

Flyadeal’s order book consists of 30 A320 Neos ordered by Saudia at the Paris Air Show in June 2019 and has since exercised options for 20 more of the single-aisle jets, according to the company. The deliveries will be used to grow the fleet and replace older A320 jets as their lease expires in the next three to four years.

The airline’s expansion plan is in line with Saudi Arabia’s Vision 2030 to diversify its economy away from oil, as the kingdom seeks to develop its aviation sector and attract more international tourists.

State-owned Flyadeal competes with Riyadh-based budget carrier Flynas, which last month confirmed plans to list its shares on the Tadawul stock exchange this year.

Aircraft deliveries

Mr Greenway, who took the helm at Flyadeal in January replacing Con Korfiatis, said sustainable growth and hitting the end of the dace target are among his top priorities.

One-third of Flyadeal’s order book comprises A321 Neos, which will be delivered starting in 2026, and the remaining are the smaller A320 Neos. Flyadeal’s A320 Neo jets are powered by CFM LEAP-1A engines.

The airline, which is scheduled to take delivery of six aircraft this year, will take its 33rd A320 Neo within the next two weeks.

“Each year from now on, we’ve got more than one aircraft a month coming, and that’s huge. You’ve got to get the crew, have the infrastructure, find routes to do it profitably on – all of this needs to come into play,” he said.

The airline can “easily” grow its network to 100 routes in the next four years with its current jet delivery schedule, he said.

Talks with Airbus

Flyadeal is charting its growth plans as the global aviation industry is grappling with severe supply chain constraints, making it difficult for airlines to ramp up operations to meet continuing demand for travel.

Major aerospace suppliers, aircraft manufacturers and engine makers have struggled to keep up with the rebound in travel after the sharp downturn during the Covid-19 pandemic, which led to job losses and an industry-wide shortage in skilled aviation workers.

Aircraft are in short supply, engine parts are scarce and Covid-related supply chain problems are “incredibly frustrating” as they persist two years after the pandemic, Mr Greenway said, echoing global airline chiefs’ complaints.

Flyadeal’s new boss will be visiting Airbus’ headquarters this month to get more clarity about the airline’s jet delivery schedule.

“I’m going up to Airbus to see them in Toulouse to say, ‘Look guys, at the end of the day, what’s happening with the rest of your deliveries for the of the year? Where are you going with this?… When are we going to get through this? What’s the road map?'”

The airline’s 33rd A320 Neo delivery in May is already a month behind schedule and comes after the carrier has already made plans for 11 wet-lease jets to cater to Hajj traffic.

Aircraft delays are an industrywide problem and “everyone is in the same boat, trying to get more information from Airbus,” Mr Greenway said.

“In all fairness, Airbus has been quite open with us.”

While the issue of jet delays does not impact Flyadeal’s ability to grow, it does make it more difficult to plan ahead.

“You want to have a slew of aircraft being delivered before the peak season in summer because you’ll make money on them straight away and off you go to the races,” Mr Greenway said.

International network expansion

Flyadeal’s network currently comprises 80 per cent domestic destinations and 20 per cent international routes, which the airline is now planning to split equally.

As part of the plans, the carrier will shift focus to connecting Saudi Arabia with the rest of the world and attract more foreign visitors to the kingdom.

It will still cater to the strong domestic demand in a country with a population of more than 30 million but “the real focus of the aircraft deliveries over the next couple of years will be our international network”, he said.

Flyadeal will announce several new international route launches in the second half of 2024 to cities in southern Europe, India and the GCC, Mr Greenway said, adding that a single Gulf visa would be a “massive” development in stimulating travel demand.

Flyadeal is also using its narrow-body jets to feed passenger traffic onto the long-haul routes of full-service airline Saudia through a codeshare agreement.

The airline currently flies to 18 domestic destinations. It also serves five international year-round destinations of Amman, Cairo, Istanbul and Dubai International Airport. It will start flights between Riyadh and Dubai’s second hub Al Maktoum International Airport on June 20. It also flies to seven seasonal summer destinations: Antalya, Baku, Bodrum, Sarajevo, Sharm El Sheikh, Tbilisi and Trabzon.

Flyadeal is planning to grow its workforce from 1,200 people currently to nearly 1,800 in 2024 and 3,000 by the end of 2025. Photo: Flyadeal

Hiring plans

Flyadeal plans to hire about 600 staff in 2024, taking its workforce to about 1,800 people by year-end, up from 1,200 currently, as it expands the fleet, according to Mr Greenway.

By the end of 2025, its workforce will swell to 3,000 people, particularly Saudi citizens and women, in line with Vision 2030, he said.

The “vast bulk” of these hires will be pilots and cabin crew and training in the kingdom means the airline won’t be facing the problem of pilot shortages that is more prevalent in other regions, he added.

New bases

The airline operates out of Riyadh, Jeddah and Dammam, and plans to add more bases over the next two years. It is already in “active discussions” with airports but expansion plans are tied to the number of incoming jet deliveries, Mr Greenway said.

Once it builds a fleet of 50 aircraft, Flyadeal will start exploring new bases, as there is room for “a lot more” growth, he said.

Growth outlook in 2024

The airline has a target to carry 10 million passengers by the end of 2024, up from just over seven million in 2023.

Flyadeal’s load factor, a measure of how well an airline fills available seats, will rise to more than 90 per cent this year, compared with a load factor “in the 80s” last year, according to Mr Greenway.

It also expects to turn a profit in 2024, similar to last year, he said, declining to provide figures.

The airline is also working on the “plumbing” under its operations, such as an effective overseas distribution and selling system, offering more payment options such as “buy now, pay later” and an On Time Performance of more than 90 per cent, he said.