SaudiGulf Airlines expects to agree Boeing 777 order by third quarter: CEO

DUBAI (Reuters) - SaudiGulf Airlines expects to finalize an agreement with Boeing to acquire up to 16 twin-aisle 777 aircraft by the third quarter of this year, its chief executive said on Wednesday.

Boeing announced this week during United States President Donald Trump’s visit to Saudi Arabia that it was in talks to sell some widebody jets to the privately-owned airline but did not disclose the aircraft type.

“We are currently evaluating a fairly good offer from Boeing,” SaudiGulf’s chief executive Samer Majali told Reuters by phone.

The order with options would include 777-200 and 777-300 versions with deliveries starting from 2020, he said.

The acquisition would likely be made partly with U.S. Export-Import Bank financing and also bank loans, he added.

Based in Saudi Arabia’s eastern city of Dammam, SaudiGulf launched in late 2016 and operates a domestic-only network with a fleet of Airbus A320 single-aisle aircraft.

The 777s could be used to fly to destinations in North America, Europe and Asia, Majali said in an earlier email, though that would depend on the airline obtaining international traffic rights.

SaudiGulf and Egypt-based Nesma Airlines obtained domestic operating licenses last year from the Saudi regulator, competing against state-owned Saudi Arabian Airlines (Saudia) and flynas, partly owned by Saudi billionaire Prince al-Waleed bin Talal’s investment vehicle.

In 2014 SaudiGulf ordered 16 CS300 jets from Canada’s Bombardier though production delays caused the airline to acquire four A320s from Airbus.

SaudiGulf is in talks with Bombardier on the delivery schedule for the order of CS300s valued at $1.21 billion at list prices as it considers whether to go ahead or not.

“Obviously the Bombardier deal is good”, Majali said, adding though that depending on how the talks go SaudiGulf would decide on whether it operates a narrowbody fleet of Airbus or Bombardier jets.

“All options are open,” he said.

SaudiGulf expects to carry 700,000 passengers in 2017, its first full year of operations, and expand its narrow body fleet to between 26 and 30 jets “within the next three years,” Majali said.

The airline could start operating international flights by the end of the year to regional cities including in neighboring Gulf Arab countries, Egypt, Sudan, India and Pakistan, he said.

(This story corrects paragraph 4 to read “The order with options would include 777-200 and 777-300 versions...” instead of “The order would include 777-200 and 777-300 versions plus options...”)

Reporting by Alexander Cornwell; editing by Jason Neely, Greg Mahlich