Engine deal determines the winner of multi-billion-dollar wide-body contract
London - Saudi Arabian low-cost operator Flynas stated that order terms from engine manufacturers would determine whether airline grants a multi-billion-dollar wide-body order to Airbus or Boeing.
The Saudi airline which is in talks with Airbus and Boeing for A330neo or 787-9 Dreamliner, is also evaluating the offers from engine suppliers at the same time.
Rolls-Royce is the only supplier for A330neo while Boeing's Dreamliners are powered by engines from both Rolls-Royce and General Electric.
Although engine prices are in the core of aircraft orders, engine delivery schedules recently became another factor to be considered since the manufacturers are striving to keep pace with shipments. Rolls-Royce, for instance, had delivered only ten A330neo engines out of the 30 scheduled for this year.
You need to start negotiations with the engine manufacturers. The engine represents a major cost, and with the trend right now of having only one engine type you need to put pressure on the planemaker so that they can work with you to get a good deal with the engines. Delivery dates for the aircraft and turbines are also central to the talks,Flynas Chief Executive Officer Bander Almohanna said at the World Travel Market trade fair in London
Flynas is likely to place the order next year. It will include at least ten wide-body jets or more. The Boeing 787-9 has a list price of $281.6 million, while the A330-900 sells for $296.4 million.
The new jets would be used to carry Muslims for pilgrimage from regions such as Indonesia and West Africa. Saudi Arabia forecasts 30 millions pilgrims by 2030 compared to 8 millions now.
Most of them are expected to be Umrah visitors the year around.
On November 13, Flynas will receive its first A320neo out of 80 ordered. The aircraft should have been delivered in August but has been shifted to November due to delayed engines.
Flynas considers converting some of them to the long-range (LR) version of the larger variant A321neo to offer Umrah flights from locations such as London and Paris, Almohanna said.