April 30, 2019 / 12:37 PM / 2 months ago

UPDATE 1-Saudi's Flynas considering upgrading Airbus A320neo order

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By Alexander Cornwell

DUBAI, April 30 (Reuters) - Saudi Arabian airline Flynas is considering upgrading part of its existing order for 80 Airbus A320neo jets to the larger A321 model, its chief executive said on Tuesday.

The airline, part owned by Saudi billionaire Prince Alwaleed Bin Talal’s firm Kingdom Holding, ordered the A320neos worth $8.6 billion in 2017.

“We (have) started evaluating and are in discussion with Airbus,” Bander Abdulrahman al-Mohanna said.

The larger versions of Airbus’ new model narrow-body jet would mainly be used for flights to the Sub-continent and North Africa, he added.

Mohanna did not say how many A321neos it could take as part of a potential order upgrade or when a decision could be made.

The airline, which this year expects 10 percent growth on the 6.6 million passengers it carried in 2018, has also been considering an order for wide-body jets.

Flynas is weighing up Airbus’ A330neo and Boeing’s 787-8 jets, which would be used to carry Muslim pilgrims to Saudi Arabia, home to the two holiest sites in Islam.

“Unless we receive the offer that we are expecting we will not conclude any deal,” Mohanna said.

The airline is in talks with international banks to raise $250 million to $300 million to finance aircraft order payments, which it expects to close this year, he said.

Flynas is scheduled to take delivery of five A320neos in 2019.

The airline expects to report its fifth consecutive profit this year although Mohanna warned overcapacity in the domestic market was driving down ticket prices.

“The situation in the domestic market is not healthy. The overcapacity is huge,” he said. (Reporting by Alexander Cornwell, editing by Louise Heavens and Kirsten Donovan)

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