(MENAFN- The Peninsula) Riyadh:Low-cost Saudi carrier flynas on Monday signed an $8.6 billion deal with European plane manufacturer Airbus to purchase 80 A320neo single-aisle jets.
Flynas chairman Ayed al-Jeaid said at the signing ceremony in Riyadh that the deal includes an option for 40 more of the short to medium-haul planes in what airline executives said is a growing domestic market.
Bander al-Mohanna, the chief executive of NAS Holding, of which flynas is a division, signed the agreement with Fouad Attar, Middle East director for the European Aerospace company.
Mohanna told a news conference following the ceremony that the deal was made for flynas "to play a leading role in the market".
Delivery would begin next year and continue until at least 2026, flynas executives said.
The 10-year-old airline exclusively operates the A320, leasing almost 30 of the aircraft, and its passenger numbers now exceed six million annually, executives said.
The carrier focuses on the Arabian peninsula and the immediate vicinity.
State-owned Saudi Arabian Airlines, known as Saudia, is the dominant player and aims to expand its own fleet to 200 aircraft by 2020.
Saudia flew more than 29 million passengers in 2015, and in June last year placed an $8-billion order with Airbus for 50 planes for domestic flights.
Two new entrants, Nesma and SaudiGulf, have launched domestic flights but Jeaid told the ceremony: "We don't believe that such competition threatens us."
He said flynas had chosen Airbus over the planes of one other company which he did not name.
Under its wide-ranging Vision 2030 plan announced in April, Saudi Arabia aims to diversify its oil-dependent economy.
Among the measures is development of the tourism sector, privatisation of state-owned services including airports, and a linking of transport networks to position Saudi Arabia as a regional logistics hub.
The plan also calls for an increase in the number of Muslim visitors performing the umra minor pilgrimage.
Even before it unveiled its economic reform plan, the Arab world's largest economy was spending billions of dollars on building and upgrading airports.
Riyadh-based Kingdom Holding Co owns a 34 percent stake in flynas.
Airbus said last week it had outstripped its own delivery expectations in 2016, closing the gap with Boeing and beating its US rival on orders.
The European manufacturer said it delivered a record 688 commercial planes, exceeding its own target which was raised in November from 650 to 670.
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