Boeing Reportedly On Brink Of $35B Airline Deal With Saudi Arabia

Boeing Co. BA may be on the brink of securing a substantial order this year.

What Happened: Saudi Arabia’s Public Investment Fund is close to finalizing a new order with Boeing, which is estimated to be worth around $35 billion, The Wall Street Journal reported, citing people familiar with the matter. The Saudi sovereign-wealth fund is expected to announce the agreement later on Sunday.

The deal is reportedly for a large number of Boeing commercial jets that will be used by a new national airline. The order is expected to create and support tens of thousands of jobs in the U.S., according to several sources who are involved.

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The creation of the new airline is part of Saudi Arabia's plan to diversify its economy and become a global business hub. Saudi Crown Prince Mohammed bin Salman stated that the new airline will capitalize on Saudi Arabia’s geographic location between Asia, Africa and Europe, allowing its capital, Riyadh, to become a gateway to the world.

Why It’s Important: The deal with Boeing comes amid signs of increased cooperation between the Saudi government and the Joe Biden administration, The Wall Street Journal reported. If completed, it would also mark another sizable aircraft order for Boeing in recent months.

In February, Air India ordered a total of 470 jets from Boeing and Airbus SE EADSY EADSF, including 220 new Boeing planes, in the largest commercial-jet order — it was valued at around $85 billion — in aviation history, according to The Wall Street Journal.

In December, United Airlines Holdings Inc. UAL said that it would buy Boeing’s 787 Dreamliners. And just a few days ago, Boeing was reportedly nearing a deal for 20 of its 737 Max planes with Japan Airlines Co. JAPSY.

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