Boeing and Riyadh Air CEOs break Dreamliner mega-deal

Boeing said on Tuesday it has reached an agreement to sell 78 of its 787 Dreamliners to two Saudi Arabian airlines, the latest major order for the widebody jet in recent months.

The jetliners will go to Saudi Arabian Airlines, or Saudia, and a new airline, Riyadh Air, which Crown Prince Mohammad bin Salman announced over the weekend. Saudia ordered 39 of the plane, with options for 10 more, and Riyadh Air will receive 39 of the two largest models of the plane, with options for 33 more.

Boeing has not disclosed a timeline for deliveries of the plane. The White House said the order is worth nearly $37 billion, although that figure does not take into account any discounts airlines typically receive, especially for large orders.

“This will support the country’s goal of serving 330 million passengers and attracting 100 million visits by 2030,” Riyadh Air said in a press release.

An employee works in the tail of a Boeing Co. Dreamliner 787 aircraft on the production line at the company’s final assembly facility in North Charleston, South Carolina.

Travis Dove | Bloomberg | Getty Images

The sales show that demand for wide-body aircraft, which are used for long-haul flights and command a higher price than the more common narrow-body aircraft, is increasing.

Riyadh Air is owned by the country’s sovereign wealth fund and will be led by Tony Douglas as CEO, a long-time industry veteran and former CEO of Etihad Airways.

“The ambition here in the Kingdom is huge,” Douglas said in an interview with CNBC’s “Squawk on the Street.” “There will be more (aircraft) orders, for the avoidance of doubt.”

He said the order will help Saudi Arabia connect to 100 destinations.

In December, United Airlines agreed to buy on at least 100 Dreamliners from Boeing and last month Air India placed an order for 460 Boeing and Airbus planes.

Boeing is set to resume deliveries of the Dreamliner plan this week after a one-week hiatus stemming from a data analysis problem it disclosed last month. CEO Dave Calhoun told CNBC on Tuesday that the resumption of delivery is “imminent.”

Boeing shares rose about 4% on Tuesday, outperforming wider market.

The airline announced later Tuesday that it delivered 28 planes in February, 24 of them 737 Max planes, up from 22 total deliveries a year earlier.

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