Boeing expected to sell nearly 80 787 planes to Saudi airlines -source

By David Shepardson and Valerie Insinna

WASHINGTON (Reuters) -Boeing Co is expected to sell nearly 80 787 Dreamliner airplanes to two Saudi Arabian airlines, a source briefed on the matter said on Monday.

An announcement is expected as early as Tuesday and the planes are expected to have list prices of nearly $37 billion. The Wall Street Journal reported the plan earlier. Airlines typically get undisclosed discounts when buying airplanes.

State-owned Saudi Arabian Airlines (Saudia) and new national airline Riyadh Air will both be acquiring Boeing (NYSE:) 787s, the source said. The airlines are expected to buy a total of 78 787s and have options to buy another 43, the source said.

Saudi Arabia’s Crown Prince Mohammed bin Salman formally announced on Sunday the creation of Riyadh Air, with industry veteran Tony Douglas as its chief executive, as the kingdom moves to compete with regional transport and travel hubs.

Riyadh Air will serve more than 100 destinations around the world by 2030, making use of the kingdom’s location between Asia, Africa and Europe, state news agency SPA said.

The new airline is expected to add $20 billion to Saudi Arabia’s non-oil GDP growth and create more than 200,000 jobs both directly and indirectly, it said.

Riyadh Air is wholly owned by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), which has more than $600 billion in assets and is the main driver of the kingdom’s efforts to diversify its economy and wean itself off oil.

In October, Saudi Arabia was in advanced negotiations to order almost 40 A350 jets from Airbus, while Boeing was also lobbying for a slice of the kingdom’s transportation expansion, industry sources had told Reuters.