Flynas also planning a possible Africa, Balkan hub
Saudi airline Flynas is considering upgrading an existing order for 80 Airbus A320neo jets to also include the larger A321 model, CEO Bandar Abdulrahman Al-Mohanna said on Tuesday.
The airline – which is partly owned by Prince Alwaleed Bin Talal’s Kingdom Holding – placed the $8.6 billion order for the A320neos in 2017.
“We [have] started evaluating and are in discussions with Airbus,” he told Reuters in an interview, adding that the larger aircraft would be used for flights to the Indian sub-continent and North Africa.
Mohanna did not disclose how many A321neos it could place in an upgraded order or when a decision would be taken.
Additionally, the carrier is expected to conclude negotiations with Airbus or Boeing by the end of year to buy at least 10 wide-body jets. The decision to choose Airbus A330neo or Boeing 787-9 planes depends on the engine makers.
"If Rolls Royce doesn’t resolve the problem with its Trent 1000 engine, we won’t be signing with them," he said. Rolls is the only supplier for the Airbus plane.
Flynas is currently in talks with international banks to raise between $250 million and $300 million to finance aircraft order payments.
Mohanna added that the airline expects a report a profit for the fifth consecutive time this year, although he said that overcapacity in the kingdom’s domestic market is driving down ticket prices.
“The situation in the domestic market is not healthy. The overcapacity is huge,” he said.
The airline is expected to take delivery of five A320neo aircraft this year.
Flynas also has plans to open a hub in West Africa or the Balkans within five years to expand beyond its oversupplied domestic market.
The carrier has 20 percent of the domestic market and expects to grow passengers by at least 6 percent in the next five years.
"Since we are a short-haul carrier, we seek to link those hubs with the current hubs in Saudi Arabia," Al-Mohanna said.
"The demand is high but there’s overcapacity so ticket prices are less than the cost.”
The carrier competes with three other Saudi-based carriers on internal routes, which weighs on fares.
"Last year we started exploring markets that are untapped by other Saudi airlines, such as Georgia, Azerbaijan and Vienna,” Al-Mohanna said.